How will the new gender pay gap legislation affect YOUR business?
New legislation is being introduced for UK businesses next month to tackle the gender pay gap. Find out if it affects you – and what you’ll need to do.
From April 2017, it will be mandatory for all companies with 250 or more employees to publish information about the pay differences between their male and female employees. The regulations have been introduced to promote gender equality in UK workplaces.
The report is no doubt a step in the right direction, and studies have shown that gender diversity throughout an organisation improves business performance, and that the best individuals are more attracted to progressive and diverse organisations.
We’ve looked at how the gender pay gap legislation may affect your business, how to ensure you report your data correctly and what the future might hold thanks to the legislation.
Is your company required to publish any data?
The legislation states that any company with more than 250 employees will be required to publish Gender Pay Gap data. The 250 mark only counts “relevant” employees, which includes apprentices, contracts personally to do work and independent contractors but not partners and LLP members.
What needs to be made public?
Your company’s Gender Pay Gap data must show the following six different calculations:
- 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.
How will it be reported?
Businesses need to make a choice over how they will report their data. This means choosing if they’re going to simply release the figures, if they’re going to explain or comment on the results, or if there is any additional data they would like to include.
The legislation states that it’s only mandatory to report the data, without any further commentary. However, the way your business chooses to report the results can have a big impact on how they are perceived by staff, the press and the public.
How to deal with the aftermath
If the results are due to be controversial, it’s recommended organisations report on more than just the data itself. Businesses should make the effort to outline any challenges and explain why certain employees earned more than others. It would also be worth outlining any successes, such as how company policy may have made a difference to the pay divide.
Companies should pre-plan a response once they are aware of the results of their data. Firstly, you should reach out to staff and advise on the results, and if they are negative, explain how you are working on improving them. Appointing a member of staff who is media trained to deal with any press questions is a great way to avoid tricky situations.
The most important thing is for a business to make it clear that if their results are negative, they are going to address this and make changes.
Will your company change?
The aim of the report is to help close the gender pay gap. At the moment, there are no consequences for businesses with large pay gaps except from being named and shamed. However, the publishing of the figures will hopefully convince big businesses to address the problem as people might boycott companies that have large pay gaps and refuse to do anything about it.
If your company has a large disparity in the pay between men and women, this legislation change offers a perfect excuse to address the issue. Where there is a gender pay gap, a review of company practices should be undertaken and announced to staff members.
Would you like further information about gender pay gap reporting?
berg is a Manchester-based law firm who is helping companies navigate Gender Pay Gay reporting.
berg’s HR specialist and Employment Partner, Michelle Gray, is hosting an online Gender Pay Gap reporting webinar on Tuesday 7th March which will cover:
- What the regulations will be and how they will impact your business
- How to prepare for the regulations
- How to interpret and apply the regulations
- How to protect against claims and manage risks
Register your interest in the Pay Gap Reporting webinar today to ensure your business avoids any challenges come April.