The Government recently published guidance for employers on calculating gender pay gap metrics for the purposes of the Gender Pay Gap Information Act 2021 (the "2021 Act").
Regulations Awaited
Regulations necessary to give legal effect to the 2021 Act are overdue but expected imminently. The regulations will require organisations with over 250 employees to publish information relating to the pay of their employees for the purpose of showing whether there are differences in such pay referable to gender and, if so, the size of such differences.
Our detailed briefing on the 2021 Act, is available here.
"Suggested Approach"
The guidance sets out a "suggested approach" for employers calculating gender pay gap metrics in their organisation.
Employers are advised to choose a "snapshot date" in June 2022. The reporting deadline will be six months from that date, in December 2022. The reporting period will be 12 months prior to, and including, the snapshot date. Employers can then calculate the number of relevant employees on the snapshot date to determine if they fall within the obligations under the 2021 Act.
The regulations will only apply to employers with 250 or more employees in the first two years after their introduction. In the third year, the requirements will also apply to employers with 150 or more employees. Thereafter, the requirements will apply to employers with 50 or more employees. The regulations will not apply to employers with fewer than 50 employees.
For those employers that are obliged to prepare a gender pay gap information report, the guidance sets out a step by step process for working through the necessary calculations. In addition, further specific detail is provided to assist with calculating:
- ordinary pay
- bonuses
- total hours worked
- hourly remuneration
- the proportion of male and of female employees who received bonus remuneration
- the proportion of male and of female employees who received benefits-in-kind
- quartiles
It also offers guidance on calculating the difference between the:
- mean hourly remuneration of male employees and of female employees
- median hourly remuneration of male employees and of female employees
- mean bonus remuneration of male employees and of female employees
- median bonus remuneration of male employees and of female employees
Next Steps
The guidance provides welcome assistance to employers in preparing to comply with impending obligations under the 2021 Act. The preparation of a gender pay gap information report is a sizeable task in which many organisations will have little or no experience. Organisations are therefore advised to ensure that those responsible for its preparation are well supported, have access to the relevant information identified in the Government guidance and are familiar with the process for calculating the metrics in advance of the publication of the regulations.
For further detail, see "How to calculate the gender pay gap metrics: Guidance note" published by the Department of Children, Equality, Disability, Integration and Youth (available here).
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.