Gender Pay Gap Reporting Response

On 17 January 2019 the House of Commons’ Business, Energy and Industrial Strategy (BEIS) Committee published a Government response to its report on gender pay gap reporting. The Government response confirms:

  • over 10,000 employers have reported on their gender pay gap. All employers required to report have done so. The Equality and Human Rights Commission (EHRC) wrote to around 1,500 employers believed to be in breach of the obligations following the deadline for the first year of reporting;
  • it will not become compulsory for small employers (those with 50, or more employees) to report on their gender pay gaps, but they are encouraged to publish data voluntarily;
  • the gender pay gap reporting guidance may be amended in the future to introduce a voluntary reporting method (or similar) for Partners. This will not be implemented for the current reporting year as data collection may already be underway;
  • the Government want employers to publish action plans alongside their reports. However, publishing action plans will not become compulsory (as the Government does not want a prescriptive format to render them of limited value);
  • the bonus calculation for gender pay gap reporting purposes will not be amended to a “pro-rated” calculation method. The Government is seeking to expose where earnings differ in the round because of working patterns which it considers is a key contributing factor to the gender pay gap. Instead the Government recommends clarifications are included as an accompanying narrative;
  • the Government will not accept recommendations to change to reporting on salary deciles (allowing for a more nuanced analysis) rather than quartiles, or to report on part time and full time statistics separately;
  • the Government will not set compulsory targets for business sectors. Instead, it will continue to work with sector bodies and cross sector organisations to ensure that members are aware on best practice for closing any gender pay gaps;
  • the Government is committed to improving employment rates for disabled individuals and refers to the consultation on ethnicity pay reporting¬†which is already underway; and
  • the Government currently believes that the EHRC enforcement strategy provides certainty about the effects of non compliance (which can include an unlimited fine), however this will continue to be monitored.

The Government are seemingly reluctant to make more material changes to the reporting regulations both because there has only been one cycle of reporting and because amendments to the regulations could affect the ability to compare data year on year. This is not to say that there will not be changes in the longer term. However, it appears most likely that these would occur after the statutory review which must take place within five years of the introduction of the scheme. In the meantime this response is a reminder to employers that their responsibilities in respect of gender pay gap go beyond reporting and they should be planning how they will address any gap identified.

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Michelle Lamb

About Michelle Lamb

Michelle is a partner in the Employment team. She advises public and private employers on all aspects of contentious and non-contentious employment law, but specializes in TUPE, change programs, employment aspects of corporate transactions and discrimination complaints. Michelle regularly procures advice from other jurisdictions to support Dentons' multinational client base.

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