26 September 2018

Gender Pay Gap Reporting: Are Changes on the Horizon?

The first deadline for affected employers to publish their gender pay gap data was in April 2018.

Less than four months later, the House of Commons’ Business, Energy and Industrial Strategy Committee (the “Committee”) has called for the regulations governing this requirement to be strengthened to increase their effectiveness.

The report ‘Gender Pay Gap Reporting’, which was published by the Committee at the start of August 2018 recognises that the UK has one of the highest gender pay gaps in Europe. The Committee noted that the gap must be closed, not only in the interests of fairness and promoting diversity at the highest levels of the UK’s business community, but in order to improve the country’s economic performance.

The report contains a number of recommendations, which include the following:

• Extending the reporting obligation to companies with 50 or more staff in time for April 2020’s reporting deadline (rather than the current 250 or more employees).
• Requiring reports to include an explanation for any gender pay gap disparity (which, at present, is optional) and to include an action plan to tackle any pay disparity on which progress must be reported each year.
• Incorporating partner remuneration into the calculations.
• Amending the reporting regulations so that the current requirement to report on salary quartiles is replaced by deciles to allow for a more subtle analysis.
• Publication of further guidance to clarify areas of ambiguity (for example, on how bonus figures are calculated).
• Give the Equalities and Human Rights Commission specific enforcement powers to impose fines for non-compliance with the Regulations.

The report also recommends that the government consults upon introducing requirements to collect and report pay gap data regarding disability and disability, with a view to potentially introducing this for April 2020.

The government will now consider the recommendations and decide which, if any, to implement. However, as the current regulations only provide for periodic review every five years, it may be some time before the Committee’s recommendations are deliberated.

A copy of the full report is available here.

We will keep you updated as matters progress in this area.

For specific advice or queries, please contact Emilie Darwin on 01242 246475 or edarwin@hcrlaw.com.

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Emilie Darwin, Partner
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