Gender Pay Gap deadline imminent

As inequality in the workplace remains an issue, one tool designed to identify and highlight inequality in pay is the mandatory pay gap reporting for employers that meet the threshold. Most will have completed their report for 2023/24 by now, but for those that haven’t, now is the time to make the finishing touches and publish it to the wider world.

What is pay gap reporting?

A pay gap is defined in legislation to be the difference between the median (or mean) hourly pay of employees in category A and the median (or mean) hourly pay of employees in category B. This is expressed as a percentage of one group’s earnings.

Reporting on that pay gap entails publishing the results of the pay gap calculations. Employers may also choose to include alongside these figures a voluntary narrative and action plan outlining the steps the organisation intends to take in reducing its pay gap.

Who must publish their gender pay gap?

Organisations employing 250 or more employees and eligible public sector employers must report their gender pay gap by a set date each year. For non-public sector employers, it is 5 April; in the public sector it’s 31 March.

The Prime Minister, Rishi Sunak, has recently reiterated plans to increase the number of companies which qualify as a smaller or medium-sized business. This would mean that the employee size threshold to be classed as an SME, would increase from 250 to 500 employees. If this is brought in, this could mean that organisations would not need to report on their gender pay gap until they had over 500 employees.

Are there any rules for reporting on ethnicity pay gaps?

What is a salary quartile for gender pay gap reporting?

What do I need to do to report my company gender pay gap?

Why was gender pay gap reporting introduced?

Gender pay gap reporting was originally introduced in order to tackle and discourage a large disparity in pay between men and women in many organisations. The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 took effect from 6 April 2017, requiring organisations to take a “snapshot” of their gender pay data on 5 April 2017. Organisations had a further 12 months in which to analyse and publish that data, by April 2018 at the latest. Aside from a break due to the disruption caused by Covid, this is a yearly exercise for organisations with 250 or more members of staff.

When gender pay reporting was introduced in 2017, a number of MPs, the Women and Equalities Committee and the group, Business in the Community, campaigned for the expansion of mandatory reporting to include ethnicity. However, despite the adoption by some businesses of voluntary ethnicity pay gap reporting, on 22 March 2022 the Government announced that this would not be introduced.

Whilst it can be a substantial undertaking to establish pay gap reporting within the organisation, it can be a valuable tool in establishing a diverse and inclusive workforce.