Large organisations with 250 or more employees are required to publish data on their gender pay gaps. Under the Equality Act 2010, men and women should be paid equal pay for equal work. The reporting requirement on the gender pay gap was brought into effect on the 6th April 2017. The Reporting Regulations brought under the Equality Act apply to both private and voluntary organisations as well as public bodies. Organisations must ensure that they are conducting gender-neutral evaluations of their jobs and pay structures to comply with the requirements of the Equality Act, as well as abiding by the relevant reporting requirements. Discrimination in the workplace must be taken very seriously by organisations since it can lead to very expensive and difficult legal action, but also will undermine morale and productivity within the business. Taking advice from our expert employment lawyers on the issues surrounding gender pay gap issues and the relevant reporting requirements will ensure you are fully compliant. Our solicitors can also guide and represent you throughout any issues of discrimination claims in the workplace.
What is Equal Pay and Equal Work?
Equal pay does not just cover the basic pay that is given for a set role. It also covers bonuses, pension schemes, sick pay, company benefits, redundancy pay and overtime. Equal work is determined under the Equality Act using one of the following methods:
- Like work- same or similar work performed by someone of the opposite sex in the same or similar place.
- Under the Fair Job Evaluation Scheme, which determines the value of a role based on the skills, training, specialist knowledge, physical requirements and the level of decision-making involved. An evaluation is performed by a panel of three or more representing the age, gender and ethnicity of the workforce. The scheme must be monitored and updated where necessary.
- Work of equal value- the role has an equal value based on the required skills, training and decision-making level.
Where an employer can justify a difference in pay showing practical differences or factors that are justified due to a different level of seniority, then a difference in pay between genders is permissible. A higher workload is not a justification here. If there is not a direct comparator then a hypothetical one can be used if it is likely that someone who was the opposite sex would be paid more in the same role.
What are the Reporting Obligations?
There is a snap-shot date for the reporting obligations- for those in the private or voluntary sector that fall under these Regulations it is the 5th April of each year. For those in the public sector, it is the 31st March. For bonuses though, the period is the whole year up to that relevant date. Authorities that are not deemed to be public bodies will fall under the private and voluntary sector regulations. Private and international schools are also covered under the same regulations.
Employers with less than 250 employees are not required to submit this information but are encouraged to do so. Organisations that have a group structure are required to submit report data for each legal entity.
The definition of an employee covers those that are apprentices as well as those on zero hours. Some self-employed workers are also covered. Agency workers are covered by their agency and not the companies that they work for. An employee on reduced pay due to being on maternity or sick leave are not covered. Anyone working mainly in England, Scotland and Wales on full pay on the relevant “snap-shot” date will be covered.
There are 6 areas that have to be covered in the reports:
- The mean gender pay gap showing the difference between the mean hourly rate of full pay men and women employees.
- The median gender pay gap showing the difference between the median hourly rate of full pay men and women employees.
- The mean gender bonus gap showing the difference between the mean bonus paid to men and women employees.
- The median gender bonus gap showing the difference between the median bonus paid to men and women employees.
- The proportion of men and women employees receiving bonuses.
- The proportion of men and women employees in the lower, middle and upper pay bands.
The report has to be signed by either a director or other responsible person that states it is accurate.
The Equality and Human Rights Commission has the right to sanction an organisation that fails to comply with the reporting requirements. Employment tribunals can order remedial measures for discrimination due to gender including salary increases, ordering back pay (for up to 6 years before the claim was filed), giving benefits that are in line with the employees of the other sex and amending the terms and conditions of a contract. Any claim is time limited to six months from the end of the claimant’s tenure subject to certain exceptions such as the employer deliberately concealing the pay different or the claimant’s incapacitation.
Contact our Equal Pay Solicitors in Mayfair and throughout London today
There are a number of ongoing evaluative, monitoring and reporting requirements created by the Equality Act 2010 that must be adhered to by employers. Failure to do so may result in sanction by the Equality and Human Rights Commission, or a claim being brought by an employee before the employment tribunal.
At Lewis Nedas, our Employment Law Solicitors have over 35 years ’ experience advising and representing national and international companies. Our Employment Lawyers have been appointed to the Office Essential Network, which is a specialist organisation aimed at assisting young start-up businesses requiring advice on employment issues, including equal pay legislation and regulations.