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Gender Pay Reporting Update

The government has today published its response to the consultation on the introduction of gender pay reporting obligations. The response reveals further information about how reporting will operate in practice.

It has been confirmed that the information required to be published will include overall gender pay gap figures calculated using both the mean and the median averages to provide a greater depth to the analysis. As previously pledged, the published results will need to take account not only of salaries but also bonus payments. Providing any form of narrative to explain the results or set out action being taken by the company will be entirely voluntary.

Publication will be required online so it is accessible by employees and the wider public. Employers will additionally be required to send evidence of compliance to a government-sponsored website. Whilst there is no commitment at this stage to introducing specific penalties for non-compliance, the response to the consultation suggested the government may operate a ‘name and shame’ approach by publicising the identity of employers known not to have complied.

The regulations are intended to come into effect in October 2016. Businesses will then have six months to provide a snapshot of data and they must then analyse and publish the information within the following 12 months.

Despite only 52% of those who responded to the consultation believing that comparability with similar organisations was important, plans to produce publically displayed league tables by sector have been announced. The government response to the consultation suggested that “competition and peer pressure (especially within the same sector) will drive employers to tackle any workplace inequalities that exist.”

As previously confirmed, businesses in the private and voluntary sector employing 250 or more employees will be required to comply and the government is commencing consultation on the inclusion of public sector employers. There are currently no proposals to lower the threshold and the phased implementation based on employer size which had previously been proposed has been regarded as unnecessary.

In confirming the commitment to public gender pay reporting, the Rt Hon Nicky Morgan MP confirmed that “transparency is one of the most powerful tools that we have for shaping behaviour and driving change.”

Further information on the government’s response to the consultation can be found here: www.gov.uk/government/consultations/mandatory-gender-pay-gap-reporting

If you have any queries, please contact Eleanor Wilkinson of Square One Law on 0843 224 7940 or eleanor.wilkinson@squareonelaw.com.

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