From 6 April 2017 employers in Great Britain with more than 250 staff are required by law to publish statutory calculations every year showing how large the pay gap is between their male and female employees.
Image source: Acas
There are two sets of regulations. The first is mainly for the private and voluntary sectors (taking effect from 5 April 2017) and the second is mainly for the public sector (taking effect from 31 March 2017). Employers will have up to 12 months to publish their gender pay gaps.
Employers must publish the following four types of figures annually on their own website and on a government website:
- Gender pay gap (mean and median averages)
- Gender bonus gap (mean and median averages)
- Proportion of men and women receiving bonuses
- Proportion of men and women in each quartile of the organisation’s pay structure
- An employer must comply with the regulations for any year where they have a 'headcount' of 250 or more employees on 5 April (where the private and voluntary sector regulations apply) and 31 March (where the public sector regulations apply), but employers of all sizes should consider the advantages.
- A wider definition of who counts as an employee is used here (from the Equality Act 2010). This means that workers are included, as well as some self-employed people. Agency workers are included, but counted by the agency providing them.
- Gender pay reporting is a different requirement to carrying out an equal pay audit.
- There are six calculations to carry out, and the results must be published on the employer's website and a government website within 12 months. Where applicable, they must be confirmed by an appropriate person, such as a chief executive.
- Employers have the option to provide a narrative with their calculations. This should generally explain the reasons for the results and give details about actions that are being taken to reduce or eliminate the gender pay gap.
- While the regulations for the public, private and voluntary sectors are near identical, and the calculations are directly comparable, the public sector regulations also take into account the public sector equality duty.
Download the joint Acas & GEO guide on Managing gender pay reporting [559kb] for more detail.
Gender pay reporting is different to equal pay
Equal pay deals with the pay differences between men and women who carry out the same jobs, similar jobs or work of equal value. It is unlawful to pay people unequally because they are a man or a woman.
The gender pay gap shows the difference in the average pay between all men and women in a workforce. If a workforce has a particularly high gender pay gap, this can indicate there may a number of issues to deal with, and the individual calculations may help to identify what those issues are.
For more information see ACAS's Equal pay page.
Reporting may show, for example, that on average men earn 10% more pay per hour than women, that men earn 5% more in bonuses per year than women, or that the lowest paid quarter of the workforce is mostly female. These results must be published on the employers own website and a government site. This means that the gender pay gap will be publicly available, including to customers, employees and potential future recruits.
As a result, employers should consider taking new or faster actions to reduce or eliminate their gender pay gaps.
What are the calculations?
An employer must publish six calculations showing their:
- average gender pay gap as a mean average
- average gender pay gap as a median average
- average bonus gender pay gap as a mean average
- average bonus gender pay gap as a median average
- proportion of males receiving a bonus payment and proportion of females receiving a bonus payment
- proportion of males and females when divided into four groups ordered from lowest to highest pay.
What should be done with the calculations?
The results must be published on the employer's website and a government website. They must, where applicable, be confirmed in a written statement by an appropriate person, such as a chief executive.
Employers have the option to provide a narrative with their calculations. This should generally explain the reasons for the results and give details about actions that are being taken to reduce or eliminate the gender pay gap.
- The narrative can say why the results show challenges. For example, an employer might explain that their executives get the highest bonuses and most of them are men. Where there is a challenge, employers should consider taking new or faster actions to reduce or eliminate their gender pay gaps.
- The narrative can say why the results show successes. For example, an employer might explain that a recent change to their bonus policy has helped provide a much lower bonus gender pay gap.
- The narrative can also be used to show plans for long-term results. For example, an employer might want to tackle the underrepresentation of women in their science and engineering roles by running a recruitment campaign for junior roles that particularly encourages women to apply. In the short-term this means more women will be at the starting salaries, which could make the gender pay gap look higher. However, in the longer-term this will balance out and the underrepresentation should be reduced.
While employers may already be taking steps to improve gender equality and reduce or eliminate their gender pay gap, this process will support and encourage action.