Toolkit 1: Final Regulations for Gender Pay Gap reporting 4 April 2017 This toolkit explains the government s final regulations for gender pay gap reporting. Employers from the private and voluntary sectors and some public bodies with more than 250 employees are required to publish gender pay gap information under Section 78 of the Equality Act 2010. This toolkit outlines what data to report, who the regulations apply to, how to calculate the data, when and where it should be published and what best reporting looks like. It also sets out the ways in which Business in the Community can support you through the reporting process, whichever stage you re at, and provides links to other useful resources.
Table of Contents What is the gender pay gap?... 3 What do employers have to report?... 4 Who will be affected by the legislation?... 5 When should data be calculated and published?... 6 For private and voluntary sector organisations... 6 For public sector organisations... 7 Where should the data be published?... 8 What does best practice reporting look like?... 9 Support and advice from Business in the Community... 10 Other useful resources... 13 Business in the Community, The Prince s Responsible Business Network 2
What is the gender pay gap? Gender Pay Gap The gender pay gap is a measure of the difference between men s and women s average earnings across an organisation. A gender pay gap of 19% means that women earn 19% less than men. It is a clear indicator of economic inequality for women in the labour market today, and is a useful tool for assessing levels of inequality in the workplace. Equal Pay The gender pay gap is different from unequal pay (see infographic below). A gender pay gap shows the difference between the average earnings of men and women over a period of time, irrespective of their role or seniority, whereas pay inequity explains the pay differences between two individuals or a group of workers carrying out the same or comparable work. Unequal pay paying women less because of their sex is unlawful. It is linked to sex discrimination in pay and may be a contributing factor to the gender pay gap. Business in the Community, The Prince s Responsible Business Network 3
What do employers have to report? Employers with more than 250 employees will be required to publish: 1 The mean gender pay gap 2 The median gender pay gap 3 The mean bonus gap 4 The median bonus gap 5 The proportion of male & female employees who received a bonus 6 The proportion of male and female employees within each pay quartile Employers must prepare a written statement confirming that the data is accurate, which will be published alongside the results. This statement must be signed by the most senior employee in the organisation. Business in the Community, The Prince s Responsible Business Network 4
Who will be affected by the legislation? Which employers? Employers in the private or voluntary sector with a head count of 250 or more relevant employees 1 will fall within the scope of the legislation. Reporting requirements will apply to each separate legal entity within a group structure. Employers in the public sector, i.e. public bodies in England listed in the Equality Act 2010 (Specific Duties) Regulations 2011 with 250 or more employees on the snapshot date. Which employees? Employees (those with a contract of employment), workers and agency workers (those with a contract to do work or provide services) and some self-employed people (who personally perform the work). Partners in traditional partnerships and limited liability partnerships are excluded from the legislation, because they are not paid but instead take a share of the profits. Those not based in Great Britain but still on the payroll of employers within scope will be covered if there remains a significant connection with Great Britain, such as an employment contract being subject to GB legislation, continuing to be domiciled in GB and employment being subject to UK tax legislation. Calculations only cover employees receiving their full pay during the specific pay period. In other words, employees who are paid a reduced rate due being on leave during the relevant pay period will be excluded. 1 A relevant employee means someone who is employed ( under a contract of employment/apprenticeship or personally providing services ) under the definition of Section 83 of the Equality Act 2010. Business in the Community, The Prince s Responsible Business Network 5
When should data be calculated and published? For private and voluntary sector organisations 5 April 2017 5 April 2017 4 April 2018 4 April 2018 Snapshot date: the first relevant date from which employers must extract the data required. Employers may publish their results between these dates. Employers must publish their data no later than this date. What is the snapshot date? This is the date on which many of the details required to carry out pay calculations should be extracted. It also marks the date from which an employer has one year to publish its gender pay report. Business in the Community, The Prince s Responsible Business Network 6
For public sector organisations 31 March 2017 31 March 2017 30 March 2018 30 March 2018 Snapshot date: employers have 12 months to publish their pay information. Employers may publish their results between these dates. Employers must publish their data no later than this date. Did you know? Scotland and Wales have taken different approaches to the equality duty as this is a devolved matter, and Scottish public bodies are already required to publish gender pay gap data. Business in the Community, The Prince s Responsible Business Network 7
What happens if companies fail to comply with the regulations? Failure to comply with the regulations will constitute an "unlawful act" under section 34 of the Equality Act 2006, empowering the Equality and Human Rights Commission (EHRC) to take enforcement action. It is a criminal offence to fail to comply with an order of the court enforcing an unlawful act notice. Where should the data be published? Employers must publish the data, and a written statement confirming that the information is accurate, on their searchable website. The website must be reasonably accessible to employees and the public. Data must be published annually and remain online for three years. In addition to their own website, employers must upload the information to a government-sponsored website. The government intends to create sectoral league tables to ensure information is understood, comparable and drives impact. For further information and advice on gender pay calculations, as well as understanding, communicating and tackling your gender pay gap, download our series of four toolkits. Business in the Community, The Prince s Responsible Business Network 8
What does best practice reporting look like? Employees do not want to be kept in the dark over the gender pay gap. Our report Gender Pay Gap: What Employees Really Think based on a sample of over 1,000 employees found that: Two thirds of participants told us that if there was a gender pay gap in their organisation, they would ask their employer what they are doing to close the pay gap. More than half (52%) would ask their employer for more information. 9 in 10 respondents think that the data should be broken down for each pay grade or job type. This suggests that employees want their employers to go beyond the current requirements of the legislation. We recommend that employers publish additional data and narrative explaining the stories behind their numbers: Publish more pay gaps Pay gaps by ethnicity, age and disability Pay gap by grade or job level Pay gap by employment pattern (fulltime versus part-time employees) Publish a story The difference between the gender pay gap and unequal pay Infographics to illustrate the gaps Contextual workforce data Description of the factors driving your pay gaps Action plan to tackle the pay gap and current initiatives Business in the Community, The Prince s Responsible Business Network 9
Support and advice from Business in the Community The gender equality team at Business in the Community can support you in your gender pay gap reporting process, whichever stage you re at. We can do this through membership advisory services, bespoke consultation and benchmarking. Membership We are the only membership organisation representing employers who want to transform the workplace by ensuring inclusiveness for women. We work to build and communicate the business case for this, to share and inspire best practice and to give employers and their people the tools to make a difference. Our service is bespoke and specialist, underpinned by our benchmarking data, research, resources and events, and channelled through our expert Advisory team who bring in-depth knowledge, support and encouragement. We work in partnership with our members to drive change from whatever the starting point and wherever the focus is required. Business in the Community, The Prince s Responsible Business Network 10
Tailored gender pay gap advisory service The gender equality campaign offers a specialist consultation service for gender pay gap reporting, available to both members and non-members. We work with employers at all stages of the reporting process to support and advise on: P Understanding the causes of inequality in your organisation P Understanding employee perspectives on gender equality at work through primary research including surveys, focus groups and written reports. P Communicating the data internally and externally P Tackling the gender pay gap Benchmarking The Business in the Community Diversity Benchmark measures age, gender and race workplace diversity. The benchmark is a management tool to help organisations evaluate their performance, including peer comparisons, and inform evidence-based decision-making around workplace diversity, including the gender pay gap. Your Diversity Adviser supports you to build an action plan and deliver bespoke benchmark consultation meetings with members. Business in the Community, The Prince s Responsible Business Network 11
Complete Benchmark* Non- Member BITC Member Gender campaign member Race campaign member Member of gender and race campaigns Gender 2,600 2,100 Free 2,000 Free Race 2,600 2,100 2,000 Free Free Gender and race 4,200 3,350 2,000 2,000 Free For more information about how the benchmark can help to measure your gender pay gap and your progress made, read more online here. For more information on membership, download our membership brochure or contact Don Cowper, Business Development manager at don.cowper@bitc.org.uk. Business in the Community, The Prince s Responsible Business Network 12
Other useful resources Thought leadership A selection of Business in the Community s research and opinion pieces: Factsheet on the business case for gender pay gap transparency Report: The Gender Pay Gap What Employees Really think Member-only toolkits on understanding, communicating and tackling your pay gaps Gender Pay Gap: What a good story looks like Root cause of the gender pay gap no one is talking about The gender pay gap in management and how to tackle it Case study Deloitte Transparency Award 2016 Case study Sodexo Early gender pay gap reporting Organisations / websites Acas guidance including a joint Acas & GEO guide on managing gender pay reporting. Equal pay portal by Sheila Wild includes detailed information about reporting. Government updates from the Government Equalities Office (GEO), including consultation reports and publications. CIPD gender pay gap updates, news, briefings and policy responses. Personnel Today news and updates on pay gap reporting and equal pay cases. Equality and Human Rights Commission (EHRC) information on the gender pay gap and equal pay. European Commission information, analysis and country factsheets. Business in the Community, The Prince s Responsible Business Network 13
Publications / research Business in the Community research into employees perspectives: The Gender Pay Gap: What Employees Really Think December 2015 The 30% Club and Chartered Management Institute: Preparing for Gender Pay Gap Reporting August 2015 Research into the reporting of gender pay gap data by IFF for the GEO: Company Reporting: Gender Pay Data July 2015 Institute for Fiscal Studies: The gender wage gap briefing note August 2016 Office for National Statistics (ONS): What is the gender pay gap? Data ONS, Annual Survey of Hours and Earnings (ASHE) 2015: Gender pay gap by industry sector Gender pay gap by employer size band Gender pay gap for those aged 40 and over Credits: Parliament picture (https://www.flickr.com/photos/rajanphotos/6461406153/) Icons (https://www.iconfinder.com/) Business in the Community, The Prince s Responsible Business Network 14