The countdown to Gender Pay Reporting has begun. Variable pay/bonus paid from 1 May 2016 will need to be reported, but many businesses haven’t begun to take action. The latest reporting date of 30 April 2018 is creating a false sense of security. So here is a brief summary with the key dates and requirements to help you get started…
From 1 May 2016 – The date for variable pay and bonus
This is the biggest priority for most organisations. If you pay a bonus, from 1 May onwards, you will need to include those payments in your gender pay calculations. Bonus is typically the area of reward that has the least amount of rigour. Managers use their discretion to allocate their bonus pot and that can lead to bias. The figures given by the Office for National Statistics show the national gender pay gap as 19.1% but when you include bonus payments the gap is closer to 57%.
So what does the Government mean by bonus?
- All payments received and earned in relation to profit sharing, productivity, performance and other bonus or incentive pay, piecework and commission.
- Long term incentive plans (including those dependent on company and personal performance); and the cash equivalent value of shares on the date of payment.
On 30 April 2017 – The ‘snapshot’ reporting date for pay
You will need to take a snapshot of your pay on 30 April next year. That snapshot will need to include:
- Basic pay, paid leave, maternity pay, sick pay, area allowances, shift premium pay and other allowances and pay e.g. car allowances paid through the payroll, clothing allowances and first aider allowances.
- On top of that you will need to include the variable pay/bonus payments made during the previous twelve months (see above).
The requirements are likely to be the headline pay gap between all men and women and then the ratio of men and women in each pay quartile.
By 30 April 2018 – The final date for publishing
The final date in our countdown is the latest date for publishing your organisation's figures. This will need to be done on a public website. The Government will also publish league tables to name and shame any organisations with poor results, and highlight the positive results of those organisations doing well in this area – hopefully the latter will be you!
Wise organisations will be creating a good narrative around results that includes, a bit more granularity, the challenges and issues faced and the actions being taken to address them. It may be that you work in a challenging sector or you need to increase the number of women working at more senior levels. A good story around your results will be a really valuable addition to the results themselves.
A reminder of the Government requirements
The draft Gender Pay regulations issued, in February 2016, by the Government in response to its consultation are:
- All organisations with 250 employees or more will need to report.
- The overall gender pay gap between all men and women in your organisation, by mean or median.
- Reporting will be annually.
- Base pay and variable pay must be included.
- Your gender pay results must be published by 30 April 2018 use a snapshot of pay data on 30 April 2017, but including the previous 12 months bonus payments.
- You must report on your external website (accessible by the public and employees).
- The government will publish league tables of results and name those organisations that fail to report.
So what next?
- Find out what your actual gender pay gap is. Innecto has a free calculator that you can download to help you do this.
- Create an action plan to address any issues.
- Start thinking about your story for prospective and current employees.
- Bring in external experts now if you need them.
- Most importantly, start now!
