In the UK, there is a requirement for certain businesses to submit data on employee pay to the government as part of gender pay gap reporting.
In this blog post, we’ll explore what is meant by the term “gender pay gap” along with which companies need to complete gender pay gap reporting, and how you go about doing this.
Time to read our post: 5 minutes
The questions answered in this post are:
1. What Is Meant by “Gender Pay Gap”?
The term “gender pay gap” refers to any disparity in earnings between men and women.
The data collected by the government through gender pay gap reporting simply compares the average hourly or annual earnings of men and women.
Whilst this is a useful indicator, it may not give the full picture. For example, companies may be more interested in understanding whether they are paying women and men differently for doing the same role. Additionally, they might want to evaluate if they are assigning a higher value to roles predominantly performed by one gender, or if pay discrepancies exist among other demographics.
Whilst we don’t want to get into a lengthy debate here regarding the topic of the gender pay gap as that’s not the purpose of the post. However, we feel it’s important to note that government requirements for reporting looks at gender pay at one level only and this may be too simplistic.
2. Do You Need to Complete Gender Pay Gap Reporting?
You must submit reports if your organisation has 250 or more employees. Another key point is that each legal entity must report separate gender pay statistics. Companies that fall under the threshold can voluntarily report their data.
This is a yearly report with key ‘snapshot’ days. The deadlines are:
- private companies and charities to submit their report is 5th April;
- public-sector organisations must report by 31st March.
3. What Is Required for Reporting?
The UK government provides a detailed guidelines on reporting requirements. The data involves a 12-month snapshot taken on the dates mentioned above. You report gender pay based on employees’ salaries before income tax and other taxable deductions, such as national insurance contributions.
The following is the information that the government requires:
- Percentage of men and women in each hourly pay quarter.
- Mean (average) gender pay gap for hourly pay.
- Median gender pay gap for hourly pay.
- Percentage of men and women receiving bonus pay.
- Mean (average) gender pay gap for bonus pay.
- Median gender pay gap for bonus pay.
The UK government guidelines are subject to change, therefore, do check out their website to find out the latest on what you need to report on and how to perform the calculations accurately. You can find more information on reporting requirements on the UK government website.
We would recommend you gather this data every quarter to be able to provide a detailed insight into the pay gap. Collating accurate data that covers the relevant period is vital and you must submit the data on time.
You must create a comprehensive ‘headcount’ report, including anyone treated as an employee, as you must include them all in the submitted data. You must exclude temporary workers and those hired by other organisations.
4. How Do You Submit a Report?
You must publish your report on your organisation’s website and the official government page because the data should be easily accessible to the public, employees, and shareholders. Additionally, you must display the information on the website for a minimum of 3 years.
If your headcount has reduced to below 250 employees on your snapshot date (31st March or 5th April) you will need to inform the government. To do this you will need to sign into the government website and follow the instructions given.
5. Why Would a Company Want to Report on Gender Pay Gap if It Doesn’t Need To?
In this post we’ve set out who needs to complete reporting but we also mentioned that you can submit your data voluntarily and you may wonder why anyone would do this.
There are reasons why you might want to report your data even if you don’t have to. These are:
- You show your commitment to pay equity to your current employees, potential employees, and customers.
- You prepare for when you need to complete the reporting. Starting off early means you can get the right processes and actions in place to prevent gaps in gender pay arising as your organisation grows.
Want to Know More?
Gender pay gap reporting can be a daunting and lengthy process.
If you would like to talk through the reporting requirements or discuss starting the process of monitoring gender pay in your organisation, we can guide you through the process from start to finish, so give us a call on 0203 146 8770 or contact us using the contact form.