By April 2018, any organisation with more than 250 employees in the private, public and voluntary sectors will be required to report its gender pay gap annually (albeit there are also calls for smaller businesses to voluntarily disclose their pay details). The initiative stretches far beyond simply providing data. It is an opportunity for businesses to disclose their attitude to addressing inequality in the workplace.
A real opportunity comes with the mandatory pay gap reporting for businesses to really understand where action may be needed and to communicate how they are going to go about achieving a more diverse workforce. This could mean access to a wider talent pool when recruiting, embracing a new way of thinking and reducing risks of equal pay claims.
However, alongside these benefits comes risks such as reputational damage, financial damage from claims and negative impacts on procurement processes. Organisations will be required by law to publish the following four types of figures annually on their own website and on a government website:
- Gender pay gap (mean and median averages)
- Gender bonus gap (mean and median averages)
- Proportion of men and women receiving bonuses
- Proportion of men and women in each quartile of the organisation’s pay structure
- A written statement, authorised by an appropriate senior person, which confirms the accuracy of their calculations. However, this requirement only applies to employers subject to the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.
Four key questions to ask:
- Do we have the data available to meet the new reporting requirements?
- Are we confident GPG reporting won’t expose discriminatory practices?
- How will our reported GPG affect recruitment efforts in the future?
- What changes do we need to make to achieve our GPG target?
It is important that businesses understand what story their numbers tell on gender equality, and are prepared to counter any risk with positive action.
To understand how to include GPG reporting in your diversity and HR agenda please refer to http://www.acas.org.uk/media/pdf/m/4/Gender_Pay_Reporting_GUIDE3.pdf or contact us now.
Wilson Wright LLP
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