Complying with UK Gender Pay Gap Reporting
In the UK, gender pay gap reporting is governed by the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. These regulations came into force on 6 April 2017. Employers must report a few key gender pay gap metrics, along with a written statement (waived for most public employers) to the UK government.
The reporting system uses a snapshot date of April 5 for private, voluntary and public employers and March 31 for most public organizations. Reports are due within a year of the snapshot date.
The UK reporting system allows employers to add an optional supporting narrative and/or action plan. This information is never required. But including it lets an organization publicly explain an identified pay gap and describe what will be done or has been done to address the issue.
In this article we will breakdown the UK Gender Pay Gap Reporting and help you to answer four questions:
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Please keep in mind that the articles in the PayAnalytics Help Center do not offer legal advice.
Who does it apply to?
For organizations with 250+ employees in the UK, annual pay gap reports are required. There are currently no plans to extend this to smaller employers. This article covers UK reporting requirements, why smaller organizations may want to report even though not required by law, and how PayAnalytics by beqom can help organizations of all sizes.
Only full-pay relevant employees - excluding those on reduced pay during the snapshot date, for example due to parental, sick or unpaid leave - are included in the calculations to ensure the data accurately reflects pay equality for employees receiving their normal pay.
What is the requirement?
The process starts with the following (see Government guidelines for gathering the data):
Gathering gender, hourly pay and bonus pay data for each employee,
Determining which employees are “full-pay relevant”.
The report must include the following calculations:
The mean and median gender pay gap of hourly pay (for full-pay relevant employees),
The gender distribution (male, female) in each quartile of hourly pay (for full-pay relevant employees),
The percentage of men and women receiving bonus pay,
The mean and median gender pay gap of bonus pay (for those employees that receive bonuses).
How does PayAnalytics help you to meet the requirement?
The PayAnalytics platforms support your team to import required employee and compensation data, explore initial insights into pay disparities and generate specific reports:
Automated pay audits to identify any pay disparities (outliers) within your employee compensation across different demographic groups using specific pay equity focused analytics and insights.
Refer to our essential guide article Reviewing your data to gain initial pay audit insights including outlier views and the raw (unadjusted) pay gaps.
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Built-in mandatory reporting enabling your HR teams to generate detailed reports on pay structures, gender pay gaps, and other key metrics required by the directive. PayAnalytics includes built-in templates such as the UK gender pay gap report.
Refer to our essential guide article Generating pay equity reports to discover our built-in report templates, which will be continuously updated based on changes to regulations.
Preparing your dataset
Note that a dataset containing at least the following data needs to be imported prior to generating the report:
Unique employee ID (mandatory for all datasets),
Gender which is defined as being binary, so either male or female, from official HR records which may be based on employee’s official documents or self-identification,
Hourly Salary which is defined as including basic pay, allowances, shift pay, bonus, piecework, holiday pay but excludes overtime, expense reimbursement, benefits in kind, redundancy or arrears, divided by the number of hours worked,
Bonus remuneration (if applicable), the pro-rated amount received by employees within the reference period, 0 if no bonus was received by an employee,
Full pay relevant indicators (if applicable).
Generating the report
You can create a UK gender pay gap report with just a few clicks:
From your navigation head to Reports and select your relevant dataset (if not already automatically selected).
Click Create new report and find the Gender Pay Gap (UK) report under Government mandated reports.
When selecting the report, you will be prompted to configure which field in your dataset indicates hourly salary, bonus remuneration and full pay relevant.
Click Generate report to view the required report sections and results.
This report is easily exported to both PDF and PowerPoint from the right top corner.
Now that you have generated your report, it’s time to figure out what to do with the report and how to take your pay equity further.
Which steps should we take next?
Reports should be uploaded to the gender pay gap service website. They must also be posted on the organization’s website so they are publicly accessible. Organizations with 250 or more employees do face fines for non-reporting.
While reporting is currently optional for smaller organizations, they may still choose to report. In this case, reporting furthers pay transparency and publicly shows an investment in workplace equality.
There are no financial penalties for organizations that report a gender pay gap, even a large one. However, the reports are all publicly available. So a large gap with no effort to close it may pose a risk to the company’s public reputation, marketability, and employee recruitment and retention. It’s therefore in the organization’s best interests to make efforts to close the gap
Conclusion and next steps
Understanding workforce diversity is key to understanding why a raw (unadjusted) pay gap might exist. You may want to check out our Workforce analytics report and how it helps to understand your organization’s changing workforce.
If you would like further support around UK Gender Pay Gap Reporting, please don't hesitate to reach out for assistance through the Help Center support channel or reach out to our pay equity consultants at clientservicespe@beqom.com.