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Gender pay reporting explained
Gender pay reporting explained
Employers 20th Feb 2018

Organisations that have more than 250 employees* must publish their first gender pay report by 4 April 2018.  The report can be published on the organisation’s own website but must also be published on the government's Gender Pay Gap website. After that, the information must remain available for a minimum of three years from the date of publication.

*Please note that for the purposes of this report “employees” includes full-time and part-time employees as well as temporary workers on a contract for services.

The gender pay report must contain the following information about staff employed by the business on the ‘snapshot date’ (ie 5 April 2017 and annually after that): 

  • The difference in the average (mean) hourly rate of pay between male and female full-pay relevant employees
  • The difference in the average (median) hourly rate of pay between male and female full-pay relevant employees
  • The difference between the average (mean) bonuses paid to male and female employees
  • The difference between the average (median) bonuses paid to male and female employees
  • The proportion of male and female employees who receive bonuses
  • The relative proportions of male and female employees in each quartile pay band of the workforce

What does “pay” include?

Ordinary pay includes basic pay, allowances, shift premia, pay for piece work, pay for holiday, maternity etc. leave. It does not include overtime, redundancy or other termination payments, pay in lieu of leave, benefits in kind or expenses. Pay is worked out before any deductions for tax, national insurance or pensions etc.

Bonus pay includes money, vouchers, payments that relate to profit sharing, productivity, performance, incentive or commission. It does not include ordinary pay, overtime or payments that relate to the termination of employment or redundancy.

Who?

The ‘employer’ is responsible for pay gap reporting.  So where a recruiter works with an umbrella company and the umbrella has the contract with the temps then the umbrella is the employer for gender pay reporting purposes. If a recruiter uses a payroll provider to administer its payroll but the recruiter has a contract of employment or contract for services with the temp, then the recruiter is the employer for reporting purposes.  

What?

The report must include a supporting statement which (a) confirms that the information is accurate and (b) is signed by a director, partner or equivalent. Employers can also include additional supporting text to explain any gender pay gap in the report. This is particularly helpful for recruiters who may need to explain any gender pay gap differences which are influenced by pay rates for temporary workers. 

Enforcement

At the time of writing less than 10 per cent of organisations expected to report have done so but this should ramp up quickly.  Some reports which published zero pay gap have been challenged and resubmitted.  A consultation on the powers of the Equality and Human Rights Commission to take action against employers who do not comply with the obligation to report closed just before we went to print. The government may at some point also consider a form of ‘name and shame’ list similar to the national minimum wage ‘name and shame’ list.

Lewina Farrell
Lewina Farrell - Head of Professional Services, REC

Lewina Farrell is Head of Professional Services at REC.  She trained as a commercial lawyer, qualifying as a solicitor in 2004 and has been with REC since 2008. Lewina leads on tax matters for REC Legal.

View More articles by Lewina Farrell >

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