One of the most talked about UK employment law developments of 2016 – the draft Equality Act 2010 (Gender Pay Gap) Regulations 2016, is expected to come into force in England, Wales and Scotland from 1 October 2016. The Regulations will impose new obligations on employers with 250 or more “relevant employees” to publish annual information on the pay gap between their male and female employees.

The information required will include the mean and median gender pay gap, bonus gap and salary quartile distribution in each April (starting in April 2017). The figures will need to be published both on the employer’s website and a designated Government website within 12 months, and will have to remain online for 3 years.

The 250 “relevant employee” headcount will only be based on each individual entity so employers will not have to aggregate employees in their corporate groups.

Impact for Employers

However, significantly, the government have subsequently confirmed that its intention is for the Gender Pay Gap Regulations to cover not only employees who ordinarily work in Great Britain under a contract of employment, but also those who work under a contract of apprenticeship or a contract personally to do work (i.e. workers).

This could potentially widen the number of employers who are required to comply with the Regulations and will likely impact professional service firms who may have to include their LLP members’ remuneration figures in their annual publications.

The Gender Pay Gap Regulations will bring with them a myriad of new potential risks for employers and their advisers, including the potential public shaming in the proposed Government compliance “league tables” and the risk of workers relying on published figures in litigation (for example sex discrimination, equal pay and whistleblowing claims).

Practical Considerations

If they have not done so already, employers would be well advised – both from a liability and reputational point of view – to start calculating their pay gap figures now, and considering communication plans and the ways they will explain and address any disparity between male and female pay in their organisation. There is bound to be a lot of media scrutiny and public interest in this area in the years to come and planning for it now before the Regulations come into force is strongly advised. Watch this space!

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CM Murray LLP (United Kingdom)

Wonu Sanda
Tel: +44 (0)207 933 9124
wonu.sanda@cm-murray.com

Zeinab Harb
Tel: +44 (0)207 933 9126
zeinab.harb@cm-murray.com

www.cm-murray.com