Which Employers Will be Caught by New UK Gender Pay Gap Reporting Obligations?
At this stage we are still waiting for the final regulations on the new mandatory gender pay gap reporting obligations. This current blog post is therefore based on what we know from the draft regulations and discussions around them.
In terms of which employers will be caught by the new gender pay gap reporting obligations, however we do know that employers in the private and voluntary sector in Great Britain will be caught if they have at least 250 “relevant employees” on a certain date in April 2017 (and each subsequent anniversary of that date). The Government estimates that approximately 7,960 employers with around 11 million employees will be caught by the new reporting obligations. This represents 34% of the total workforce in Great Britain.
The draft regulations define a “relevant employee” as someone who ordinarily works in Great Britain and whose contract of employment is governed by UK legislation, i.e. it includes a narrow definition of employment. We understand, however, that the final version of the regulations is likely to include a wider definition of “employment” to take into account workers, apprentices and some self-employed individuals if they provide their services personally, as well regular employees. Agency workers and contractors who are not employed by the employer will not have to be taken into account for these purposes. It is clearly essential that the final regulations make a better job of distinguishing between the relevant categories than the legislature has managed so far – as soon as you stray out of Schedule E employment some difficult questions of definition arise and it would be unfortunate if there were any material uncertainty as to who counts and who doesn’t.
The draft regulations do not deal specifically with the position of group companies. As things currently stand each individual company within a group will be required to report on its gender pay gap if it by itself has at least 250 relevant employees on the relevant date, but there has been some talk that the Government will permit slightly different requirements for different governance structures, e.g. for subsidiaries and parent companies. We will have to wait and see.
The Government will also introduce a mandatory requirement for public bodies in England with 250 or more employees to undertake gender pay gap reporting. The specific obligations within the general public sector equality duty in Scotland and Wales already include gender pay gap reporting. In Scotland, for example, public bodies with more than 20 employees are obliged to publish gender pay gap data and in Wales public bodies are required to have “due regard” to the need to have equality objectives that address the causes of pay differences, including those relating to gender, between their employees. The public sector reporting requirements in England will mirror those that will apply to private and voluntary sector organisations so, for example, affected public bodies will have to publish data on their mean and median gender pay gap, mean and median bonus pay gap, and on the proportions of male and female employees in each salary quartile.