Gender Pay Gap Reporting - Are You Ready?

The government has confirmed its intention to introduce similar gender pay reporting obligations for the public sector as for private and voluntary sectors. This will include academy trusts and schools with 250 or more employees.

The consultation, which was launched on 18 August 2016 and closed on 30 September 2016, explains that public sector reporting obligations are intended to mirror those for the private and voluntary sectors, to ensure consistency and comparability across the sectors. The outcome of the consultation is yet to be published.

Importantly, the government has indicated that the reporting timetable for the private and voluntary sector regulations will also be followed for the public sector. This means we can expect mandatory gender pay gap reporting for both the private and public sectors to be introduced in April 2017. The commitment to introduce regulation in this regard is evident. Should it proceed, the first publication date for associated data will be April 2018.

Contents of the Gender Pay Gap Report

The draft regulations require affected employers to publish:

• Overall gender pay gap figures calculated using both the mean and median average hourly pay. The median, which is used by the ONS, is thought to be the best representation of the typical difference between the genders as it is not distorted by the small number of very high earners.
• The numbers of men and women in each of four pay bands (quartiles), based on the employer’s overall pay range. This will show how the gender pay gap differs across the organisation, at different levels of seniority.
• Information on the employer’s gender bonus gap; that is the difference between men and women’s mean bonus pay over a 12 month period.
• The proportion of male and female employees who received a bonus in the same 12 month period.

Employers will have the option to include a narrative explaining any pay gaps and setting out what action they plan to take to close them. The provision of a narrative will be strongly encouraged in the guidance accompanying the regulations, but it will not be mandatory.

Timing and Publication

Affected employers must analyse their gender pay gap each April, and publish their gender pay gap report within 12 months. Thereafter, employers must produce and publish an annual report, publishing it on its own website, keeping it online and publicly available for three years. The information must also be uploaded to a government website.

Enforcement

The draft regulations do not contain enforcement provisions or sanctions for non-compliance. However, the government has stated it will run checks to assess non-compliance and publish tables, by sector, of employers’ reported gender pay gaps. It will also consider the option of publicly identifying those employers who have not complied.

How to Best Prepare

In the first instance, it is advisable that schools understand their own data and that it is accurate and can be relied upon. In addition, schools must understand the information required to produce the reports and consider the most effective way of capturing the necessary data.

It is advisable to:

• Carry out a practice run (perhaps with the benefit of legal privilege) to ascertain the extent and nature of any pay gap.
• Analyse whether the reports create any legal, organisational or reputational risks, and consider a strategy to address these.
• Take steps to ascertain the cause of any pay gap, not only to prepare the accompanying explanatory narrative but to also consider what can be done to close the gap (if appropriate to do so).

For all schools it is helpful to have a transparent and robust pay policy so that all employees understands how pay decisions are made.

For more information, please contact Alice Reeve in our Academies team on 0117 314 5383.