ACAS and the Government Equalities Office have jointly published guidance on the Equality Act (Gender Pay Gap Information) Regulation 2017 which are due to come into force on 6 April 2017 for large private and voluntary sector employers.

Some employers will therefore already need to start preparing for the publication as it will need to go on their website and on the designated government website. The guidance is aimed to shed light to what information needs to be published under this legislation which includes the overall gender pay gap figures for relevant employees, calculated using both mean and median average hourly pay. It also provides some clarity around how employers should handle overseas employees and how pension contributions and bonus payment, as well how to deal with any employees who do not identify as male or female.

Employers should take the following steps in preparation:

Step 1 – identify the employees for which you will need to report, ascertain their gender, weekly working hours and calculate an hourly rate of pay of each full-pay relevant employee, using the methodology set out in regulation 6 of the regulations.

Step 2 – calculate the various statistics that need to be provided under the regulations, with worked examples of the mean and median gender pay gap, the mean and median gender pay bonus, the proportion of male and female employees receiving a bonus and the proportion of male and female employees in each quartile band.

Step 3 – prepare an explanatory statement to go with the figures.

Step 4 – publishing gender pay information. The government website is yet to be available but should be shortly after April 2017.

Step 5 – implementation. The purpose of the Regulations is to close the gender pay gap. Companies will need to assess how to overcome the hurdles of the gap, given bonuses are heavily performance based. Where performance is strongly linked to sales figures, for example, which, if not detachable from working late, could be harder than it seems to close the gap; male employees will continue to be able to work later in general with female employees from a certain age, needing to get home. Companies will need to consider how best to close the gap, taking such matters into considerations.

For now, employers with less than 250 employees will not have to comply with the regulations but the guidance states that they are strongly advised to do so.

For now, there are no enforcement provisions or sanctions for non-compliance and one of the consequences of this is that where there are ambiguities in the regulation, employers may adopt the approach which leads to the most favourable result.

For more information please visit: http://www.acas.org.uk/index.aspx?articleid=5768
For further information, please contact Koichiro Nakada – Head of Japan Business Group (koichiro.nakada@lewissilkin.com) and Yoko Nakada - Senior Associate, Deputy Head of Japan Business Group (yoko.nakada@lewissilkin.com).
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