Gender Pay Gap Reporting - New draft ACAS Guidance published

After April this year, employers with 250 or more employees will be required to calculate and publish details of the pay gap between their male and female employees. ACAS and the Government Equalities Office (GEO) have published a draft joint guidance note and some factsheets to assist employers with compliance. Copies of these are available here.

A summary of what the guide covers is set out below, including the 5 key steps employers need to carry out to comply:

• The guide sets out to which organisations the regulations apply. This in itself is complicated. The threshold of 250 ‘employees’ requires, on 5 April each year, the counting of not just conventional employees but also workers, some self-employed people, employees working abroad and, possibly, some partners.
• Step 1 is extracting the essential information. The guide sets out details of what this should cover including:
  • a list of ‘relevant employees’ (those employed on 5 April, but excluding partners) and ‘full-pay relevant employees’ (excluding those on leave who are paid less than their usual rate) and their gender. These lists may contain different people from the ‘employees’ counted for the purposes of the threshold mentioned above. The information below must be gathered on one or sometimes both of these categories of employee.
  • Ordinary pay (including money payments such as allowances, shift premium, and leave pay and excluding items such as overtime pay and benefits in kind);
  • Bonuses calculated over 2 different reference periods (the normal pay period in which 5 April falls and the 12 months ending on 5 April);
  • Weekly working hours including an averaging process for those without normal hours;
  • Hourly pay. The guide has an explanation of how to calculate this using the average figures specified in the regulations (30.44 days per month and 365.25 days per year).
• Step 2 is the calculations. The guide sets out details of how to carry out the following calculations, with examples:
  • Mean and median gender pay gap using hourly rates of pay as the comparison;
  • Mean and median bonus pay gap;
  • The proportion of males and females receiving a bonus; and
  • The proportion of males and females in each quartile by reference to hourly rates of pay.
• Step 3 is the creation of a supporting statement. The guide considers who can sign this, its minimum requirements and what it should, ideally, cover.
• Step 4 is the yearly publication of the gender pay information, the first such report being required before 4 April 2018.
• Step 5 is the implementation of plans to manage the gender pay gap. This is not a legal requirement, but a recommendation of best practice by ACAS and the GEO.
• The guide also provides a useful explanation of the key terms in the legislation.

It should be noted that the ACAS/ GEO guide is not legally binding, it is simply guidance. There are still aspects of the gender pay gap regime that are unclear and many aspects that are complicated. Any employer who exceeds or is near the threshold of 250 employees should seek legal advice on compliance.