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Gender Pay Gap Reporting is just around the corner…

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The implications of the Gender Pay and Bonus Gap Reporting Regulations will be far beyond the risk of equal pay claims for the largest UK employers and could affect a company’s market reputation, employee relations and its ability to recruit and retain staff.

The latest draft of the reporting regulations setting out what private sector organisations employing 250 people or more will have to do in order to comply with the new requirements is expected to be published by the Government imminently, and affected employers should already be giving serious consideration as to how they will need to be addressed.

How businesses report their gender pay and bonus gaps is critical. Publication of a high gender pay or bonus gap is likely to attract adverse press interest and close employee scrutiny and it is therefore imperative that they are in a position to be able to contextualise any gap and present a positive action plan in relation to how they address it. Taking action now to prepare for the forthcoming new reporting regime is therefore vital and should be high on Board agendas.

Undertaking an initial review and collating pay and bonus gap data is a positive first step, and will enable businesses to analyse the data to identify any reasons for any gender imbalance or gender pay issues. They should also be taking legal advice now on considering how and when to report their gender pay and bonus gap statistics.

It is not yet clear how much detail the law will require – at a minimum businesses will be required to provide the percentage difference in the average pay of men and women across its business, which may present a distorted and unhelpful picture.  The Government has indicated that they will also be required to publish the difference in bonus payments.  A review will be an important step in gathering data, deciding on reporting strategy and developing gender equality plans to enhance female participation and career progression and more robust and transparent pay practices. 

The final regulations are likely to come into force in October 2016, with the first mandatory reports due in 2017, which means that every affected business should be taking action now.

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