On 11 February 2016 the Government published its response to the consultation on gender pay gap reporting together with draft regulations which they will consult on until 11 March 2016.

  1. It applies to those employers employing 250 as at 30 April each year. It appears to be limited to employees in separate legal entities, and so one large group with lots of subsidiary companies with 249 employees will not have to report their gender pay gap at all.
  2. Employees are those who “ordinarily” work in Great Britain, and whose contract of employment is governed by UK legislation.  This is a narrower definition of employee than appears in the Equality Act 2010 and means that those who count as ‘workers’ i.e consultants and members of LLPs would not be counted in the 250 employee threshold.
  3. Reporting must be every 12 months broken down by salary quartiles showing the mean and median (the ‘typical difference’) difference in pay between men and women’s salaries.
  4. Pay includes basic pay, paid leave, maternity pay, sick pay, area allowances, shift premium pay, bonus pay and other pay (including car allowances paid through the payroll, on call and standby allowances, clothing, first aider or fire warden allowances). It does not include pay for a different pay period, overtime pay, expenses, the value of salary sacrifice schemes, benefits in kind, redundancy pay, arrears of pay and tax credits. Pay is to be calculated before deductions for PAYE, national insurance, pension schemes, student loan repayments and voluntary deductions.
  5. Bonuses must be separately reported broken down between men and women. Bonuses include: (a) payments received and earned in relation to profit sharing, productivity, performance and other bonus or incentive pay, piecework and commission; (b) long term incentive plans or schemes (including those dependent on company and personal performance); and (c) the cash equivalent value of shares on the date of payment.
  6. There will be no requirement to break down between full and part time employees or by job grade.
  7. Questions still to be answered are whether this will apply to the public sector as well as the private sector? Whilst the Government says that it intends it to apply to larger public sector employers, s78 of the Equality Act 2010 specifically excludes the public sector and there is no suggestion that this will be amended. Indeed one of the specific reasons for not reducing the threshold below 250 was because of the burden of amending primary legislation.
  8. After consultation which ends on 11 March 2016, the draft regulations will be placed before Parliament in the summer, companies will be required to provide a snapshot of data as at 30 April 2017 and then report their data on a searchable UK website, in English, with effect from April 2018 and leave it there for 3 years. The data must be signed off by a senior person (as defined in the Regulations) as being true and accurate and reported to a Government sponsored website.
  9. The Government intends to have ‘comparability’ which suggests league tables. Additional narrative is voluntary.
  10. There are to be no civil penalties for failure to comply, other than ‘naming and shaming’. This is a change from the consultation which suggested that a £5,000 penalty would be imposed.