Gender Pay Gap Reporting
Insight
An Overview
The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 oblige any organisation that has 250 or more employees to publish and report specific figures about their gender pay gap. The Regulations exclude public bodies in Wales and Scotland as they are subject to separate devolved regulations, namely the Equality Act 2010 (Statutory Duties) (Wales) Regulations 2011 and Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012. (Some public bodies in Scotland and Wales voluntarily report gender pay gap information in line with the 2017 Regulations. This can be done by creating an account on the Government’s online Gender Pay Gap Service.)
When should I publish Gender Pay Gap Information?
This will depend on which snapshot date you first used. The figures must be calculated using a snapshot date, which is
31 March for public sector organisations
5 April for businesses and charities.
You have a year from the snapshot date to publish the information. Your first snapshot date would have been in 2017, and in practice many employers didn’t publish reports until a year after the snapshot date. This practice had continued and means that many employers are continuing with the same time frame of publishing a year after the snapshot date.
The Government’s online service shows information in a spreadsheet marked 17/18, 18/19 etc, and you can see from the spreadsheet which organisations haven’t complied with the publication date. Note that the Government have announced that enforcement of gender pay reporting has been suspended in 2020 due to the coronavirus pandemic.
Who counts as an employee?
The definition is comparatively wide and includes people with a contract of employment, workers and agency workers, and self-employed people where they must personally perform the work. It based on headcount as opposed to full time equivalent. Partners who take a share of the organisation’s profit do not need to be included as employees.
What data needs to be published?
Tip: You can use the Close the Gap Calculator which is a free resource to assist in calculating the gap.
All of the gaps are calculated in the same way: subtract the female rate from the male rate, and divide this by the male rate, then multiply by 100.
Mean gender pay gap in hourly pay
Mean is more commonly referred to as the average, so you would divide the total pay for females by the number of females, and the same for males.
Median gender pay gap in hourly pay
The median is the midpoint, which is the value separating the lower half from the higher half. Given that the numbers of employees will be at least 250, this calculation can easily be done on existing business report systems or by using the MEDIAN formula on Excel.
Mean and median bonus gender pay gap
Bonus pay means any remuneration (including vouchers and share options) that relates to profit sharing, productivity, performance, incentive and commission. It does not include overtime or pay referable to redundancy or termination of employment.
Proportion of males and females receiving a bonus payment
This will be presented as a percentage, for example, 65% of men received a bonus payment and 62% of women received a bonus payment.
Proportion of males and females in each pay quartile
This can be done by sorting all staff from lowest paid to highest paid and dividing the incumbents into quartiles. For example, if you have 1000 employees, you would have 250 employees in each quartile. It will not always be possible to have exactly the same number in each quartile. The legislation states that the quartiles should comprise “as far as possible” an equal number of employees.
Where employees receiving the same hourly rate of pay fall within more than one quartile pay band, the employer must (so far as possible) ensure that, when ranking the employees, the relative proportion of male and female employees receiving that rate of pay is the same in each of those pay bands.
It is not necessary to publish the numerical composition of the quartiles but it is advisable to record this internally. This will also assist year on year evaluation as the quartile distribution may change.
Once the quartiles have been designated, you need to calculate the proportion of male and female employees within each quartile.
Publication of Gender Pay Gap Information
In order to comply with the Regulations, the information must be accompanied by a written statement which confirms accuracy. Regulation 14 (2) details who should sign, and includes partners, officers, director and senior employees. The information must be published on the employer’s own website for at least 3 years from the date of publication, and must also be published on the Government’s Gender Pay Gap Service website.
While not obligatory, many employers prepare a narrative report which sets the pay gap data in context.