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Privacy statement - Terms and conditions

gender pay gap - obligations on public authorities

4 April 2017

The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 ('the Regulations') come into force on 31 March 2017.

The Regulations require all public authorities included under the legislation with more than 250 relevant employees to publish their gender pay gap, and set out how public authorities are expected to calculate and report on the gender pay gap within their organisation from March 2017.

The key obligations introduced by the Regulations require public authorities to report on the following:

  • the mean and median hourly pay gap between men and women ('hourly pay' also includes any bonuses, allowances and shift premiums paid)
  • the mean and median annual bonus gap between men and women ('bonus' is defined widely to include commission and securities)
  • the percentage of men and women participating in the bonus
  • the number of men and women in each of the four quartile pay bands.

By 30 March 2018, public authorities will be required to publish hourly pay data for the relevant pay period in which 31 March 2017 falls and bonus pay data for the period from 1 April to 2016 to 31 March 2017, and thereafter annually.

Key points

The definition of 'employment'

The Regulations use the broad definition of 'employment' from the Equality Act 2010.

What does this mean?

It means workers (which will include zero hours workers) and independent contractors who are directly engaged – i.e. where their contract obliges them to perform the work personally – are included, meaning more public authorities are likely to fall within the scope of the Regulations with these workers counting towards the 250 employee threshold.

Is there an exception?

Pay data does not need to be included where:
  1. the individual is employed under a contract personally to do work
  2. the public authority does not have the pay data
  3. it is not reasonably practicable for the public authority to obtain it. 

What is meant by 'reasonably practicable' is yet to be determined so there is scope for argument regarding this.  

Agency workers who are employees of the agency that supplies them would not be covered.

The snapshot date

This is 31 March.

Pay

Only 'full-pay' relevant employees are to be included when calculating the mean and median hourly pay rates. This means that employees on reduced or nil pay due to family, sick or special leave will be excluded from the calculations, giving a more accurate picture. 

Shift premiums are included in the definition of 'pay', although overtime is excluded.                          

Benefits in kind and salary sacrifice schemes are also excluded, which may have the effect of distorting the pay gap. Whilst, on the one hand, some traditionally female salary sacrifice elements will be excluded – such as childcare vouchers – it will also be possible for employers to disguise employees’ overall package by encouraging high earners to take part in salary sacrifice schemes, for example by increasing pension contributions.

Bonus

Bonuses are included in the calculation of the 'hourly rate of pay' so will be part of the calculation of the pay gap, but in addition the gender bonus gap must also be reported separately.

Bonus pay includes money, vouchers, securities, securities options and interests in securities and will include any payment which relates to profit sharing, productivity, performance, incentive or commission.

Only the proportion of a bonus payment that refers to the relevant pay period should be included in the hourly rate of pay for the purposes of calculating mean and median gender pay. This ensures that only the portion of an annual bonus payment that properly belongs to the relevant pay period will be included.

In respect of the 12 month period ending with the snapshot date public authorities must also publish:

  • the difference between the mean and median bonus paid to male and female employees
  • the proportions of male and female employees who receive bonuses.

That means that for the first gender pay gap report, bonuses paid between 1 April 2016 and 31 March 2017 are included. Bonuses paid to relevant employees who have left employment before the snapshot date do not need to be included.

It is notable that there is no requirement or ability to provide data on a full-time equivalent basis, meaning that where part-time employees receive a pro-rated bonus the gender bonus gap may be significant, especially as part-time employees are more likely to be female. Where this is an issue, we recommend that this information is published alongside the bonus gap figure.         

Four quartile pay bands

The four quartile pay bands require public authorities to split the workforce into four equal sized groups which are organised in accordance with the hourly pay rate. The proportions of male and female full-pay employees within each band must be reported as a percentage of all full-pay employees. The actual figures in the pay bands do not have to be published.

Publication of the gender pay gap

The data must be published on the public authority’s website in a manner that is accessible to all its employees and to the public and remain there for at least three years. All gender pay reports must also be uploaded to a government website. 

Additional publication requirements

Public authorities listed in the Regulations are also required to publish information (in a manner that is accessible to the public) no later than 30 March 2018, and subsequently at intervals of no greater than one year, to demonstrate their compliance with the public sector equality duty. This information must include, in particular, information relating to persons who share a relevant protected characteristic who are its employees or other persons affected by its policies and practices. The requirement to provide information in relation to employees does not apply to a public authority with fewer than 150 employees.

Public authorities listed in the Regulations must also prepare and publish one or more objectives that it thinks it should achieve to do any of the following:

  1. eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under the Equality Act 2010
  2. advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it
  3. foster good relations between persons who share a relevant protected characteristic and persons who do not share it.

Such objective(s) must be specific and measurable. They must be published no later than 30 March 2018 (save where the public authority has, within the period of four years ending with 30 March 2018, published equality objectives in compliance with regulation 3(1) of the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2011) and subsequently at intervals of not greater than four years beginning with the date of publication.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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Professional Development Lawyer

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