Gender pay gap reporting regulations criticised for lack of clarity


The new rules will come into force on 6 April 2017 for private sector companies in England, Scotland and Wales employing 250 or more workers. 
 
The UK government has published its final gender pay gap reporting regulations amid criticism that it has failed to fully clarify what employers must do to comply.
 
The new rules, which come into force on 6 April 2017 for private sector companies in England, Scotland and Wales employing 250 or more workers, vary in a number of key ways from the draft version. One major change relates to how the term ‘employee’ is defined. 
 
Although previously unclear, it now mirrors the definition outlined in the Equality Act 2010. As a result, the term covers many self-employed workers who are engaged directly by employers such as consultants and independent contractors, increasing the number of firms actually covered by the regulations’ scope.
 
But such a definition could make collecting pay data more difficult for organisations as self-employed workers are usually not included on their payroll – although the rules state that self-employed workers can be exempted if it is not reasonably practicable to obtain data about them.
 
The ‘snapshot date’ from which employers have to collect pay data has also been changed from 30 to 5 April. While the shift will make no difference in the case of employees paid monthly, it will effect companies that pay their workers on a weekly or fortnightly basis, especially if annual bonuses are paid in early April.
 
The definition of how ‘pay quartiles’ will operate has also been clarified. It means that firms will need to split their workforces into four equal-sized groups, which are organised according to hourly pay rate, from the lowest to highest. 
 
Only employees on “full pay” are to be included when working out mean and median hourly pay rates, meanwhile, following concern that figures could be distorted by workers such as women on maternity leave who are being paid at a lower rate than usual during the snapshot period.
 
But experts have pointed out that the regulations do not go far enough to explain what is required from employers. 
 
Clare Gregory, a partner in DLA Piper’s employment practice told the Chartered Institute for Personnel and Development’s People Management news service: “The bottom line is that employers are likely to still be left scratching their heads in their quest to identify how to calculate the difference between both the mean
and median rates of pay for male and female employees; the difference between the mean and median bonus pay, and the proportions of male and female employees who have been paid bonus pay.”
 
Alastair Woods, a partner in management consultancy PwC’s reward practice, warned that employers would also find it difficult to work out which employees and what elements of their pay should be included in calculations.
 
“Gathering the data for this will be a big challenge for many companies as it is not all in the same place,” he said. “Employers should be considering these issues as soon as possible to ensure that they accurately capture their true gender pay position.”
 
In news elsewhere, a new online tool developed by the government and the Office for National Statistics has been released http://visual.ons.gov.uk/find-out-the-gender-pay-gap-for-your-job/ to enable workers to find out what the gender pay gap is in their particular occupation. 
 
Traditionally male-dominated sectors such as construction and professions such as financial managers and directors show the biggest differentials in favour of men. Female-dominated roles such as midwives and probation officers have the largest pay gap in favour of women. Earnings parity exists for bar staff, waiters/waitresses and nurses, however.