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Pay Gap Transparency Tips

The mandatory requirements for gender pay gap affecting the voluntary and private sector employers first came into effect on April 6, 2017.  Gender pay statistics are now being reported by household names and the media is increasingly scrutinizing them.

The 2010 Equality Act Regulations (Gender Pay Gap) Regulations 2017 applies to any voluntary or private sector employer that has 250 employers or more in Great Britain on April 5th every year (called ‘snapshot date’).  When it comes to Employee, that means anybody who is employed under a service contract, an apprenticeship contract, or a contract for personally doing the work, and that also includes some contractors and casual workers.

Public sector employers are not included in the scope of these regulations but there is a similar regimen that applies to that sector.

Top transparency tips

Close the gap. The only time that transparency can be a really comfortable experience is when the information is positive that is being provided. If your company isn’t at the 250 employee threshold yet for reporting, you should examine your pay information right now so that you can identify any discrepancy and address them before reporting is mandatory for your organization.

Your friend is the voluntary accompanying narrative. Although completely voluntary, it is encouraged that you provide a contextual narrative along with the gender pay information in Acas guidance.  An unavoidable disparity between women’s and men’s pay might be discovered even by truly committed employers.

For example, contributing factors may include the fact that it is more likely for women to work part-time (and accordingly be paid less) compared to men.  Although it is not evidence of discriminatory or inequality practices, like data, without an explanation, it may result in undeserved negative attention.  This can be explained by a voluntary narrative.

Review what constitutes ‘pay.’  In order for gender pay gap statistics to be generated, employers must calculate the hourly pay rate for every employee.  It is a composite pay rate that accounts for basic pay, bonus pay, shifts premium pay, pay for leave, pay for piecework, and allowances.

This calculation takes shift pay premiums into account, however, it doesn’t include overtime payments.  Make sure to include the relevant components only.

Check the bonus pay.  There is a separate calculation for gender bonus gap as well as being part of the calculation for gender pay gap.  However, there are some bonuses that are not included in the gender pay calculations.  Acas guidance states that bonuses are included in the calculations only if there are receiving within the specific bonus period.  For these calculations, it isn’t relevant what period the bonus is attributed to – it is only when the payment was received.  For instance, a bonus that was awarded in 2015 for good performance, but actually received in May of 2017 must be included in the calculations for the April 6, 2016 to April 5, 217 bonus period.

The regulations aim to identify any discrepancies and to address them.  If we have learned anything from recent media coverage, it is that there is no such thing as a perfect employer, but a critical step for moving in the right direction is to identify pay disparities and taking action that addresses them.

If you want some more detail on pay gap transparency look at this piece from Marks Sattin – it should shed some light on the matter.

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