On the 2nd of August 2018, the Business, Energy and Industrial Strategy (BEIS) Committee published its 13th report of the 2017/19 session that looked at gender pay gap reporting. The 48 page report looked at the first year of reporting on a “lessons learned” basis and came up with a number of conclusions and recommendations (from page 36).
The Global Payroll Association recommends that HR professionals read this report as, for example, it included conclusions that there was ambiguity in the regulations, the reporting requirement should be extended to include partners of businesses and the Equality and Human Rights Commission (EHRC) should have greater enforcement powers. In its recommendations, it said that the 250 reporting threshold should be reduced to 50 in 2020 and the regulations should be changed so that the information reported better identifies whether there is a pay gap (e.g. re bonuses and reporting in deciles rather than quartiles)
In January 2019, the government published its response to this report. This looks at all of the recommendations in the 48 page report and responds to each of them in a report that totals 14 pages. Again, the Global Payroll Association believes that HR professionals should read government responses like this as it gives an insight into current and future thinking and therefore, changes that we may have to action. However we summarise the main points:
- The government believes that its guidance from various sources was targeted correctly and aided the 100% compliance (of the companies that were required to report). But this guidance will be kept under review
- There will be no alignment of the reporting deadline with other business reporting deadlines such as the P11D by the 6th of July. The government believes flexibility is important so that businesses can align with internal processes
- Action plans produced by employers will not be made a mandatory requirement and remains voluntary but are encouraged
- Employers will have to assess annually whether they fall within the scope of the regulations and the government will not be publishing a list of all of the employers they expect to report
- The government is content with the ERHC’s enforcement strategy and powers and does not see a need to change these, unless evidence subsequently proves to the contrary
- The regulations will not be changed in respect of the information that has to be reported. This includes having additional information on the report such as disability. But if the current gender reporting does not change the behaviours of employers, the government will consider making changes but will ensure consultation with employers. The government response also points to ethnicity pay reporting and the fact that there was a consultation out on this
- Organisations with less than 250 employees will be encouraged to report voluntarily but the law will not change to require smaller employers to report. Small and medium employers could find this “particularly burdensome”
- There will be no changes to the law in respect of reporting partners in traditional partnerships and limited liability partnerships but the government recognises there are concerns in this area
- The government is working with representative bodies such as the Chartered Institute of Personnel and Development and the Chartered Management Institute regarding “best practice” on actually tacking the gender pay gap if it is identified. This is a priority and they will continue to engage with different representative bodies
- The government is clear that gender pay gap reporting sits with a number of different departments and says it is not appropriate for the Government Equalities Office to coordinate government policy
- Government departments will be looking at their own gender pay gaps if they exist and the Cabinet Office is developing a best practice guide
There are a number of things in this government response and the Global Payroll Association recommends reading it in full. Then reason is that this is a new policy and there are strong indications that it will be reviewed sooner than the 5 years the legislation requires. The good thing is that gender pay gap reporting remains unchanged – at the moment!
On the 2nd of August 2018, the Business, Energy and Industrial Strategy (BEIS) Committee published its 13th report of the 2017/19 session that looked at gender pay gap reporting. The 48 page report looked at the first year of reporting on a “lessons learned” basis and came up with a number of conclusions and recommendations (from page 36).
The Global Payroll Association recommends that HR professionals read this report as, for example, it included conclusions that there was ambiguity in the regulations, the reporting requirement should be extended to include partners of businesses and the Equality and Human Rights Commission (EHRC) should have greater enforcement powers. In its recommendations, it said that the 250 reporting threshold should be reduced to 50 in 2020 and the regulations should be changed so that the information reported better identifies whether there is a pay gap (e.g. re bonuses and reporting in deciles rather than quartiles)
In January 2019, the government published its response to this report. This looks at all of the recommendations in the 48 page report and responds to each of them in a report that totals 14 pages. Again, the Global Payroll Association believes that HR professionals should read government responses like this as it gives an insight into current and future thinking and therefore, changes that we may have to action. However we summarise the main points:
- The government believes that its guidance from various sources was targeted correctly and aided the 100% compliance (of the companies that were required to report). But this guidance will be kept under review
- There will be no alignment of the reporting deadline with other business reporting deadlines such as the P11D by the 6th of July. The government believes flexibility is important so that businesses can align with internal processes
- Action plans produced by employers will not be made a mandatory requirement and remains voluntary but are encouraged
- Employers will have to assess annually whether they fall within the scope of the regulations and the government will not be publishing a list of all of the employers they expect to report
- The government is content with the ERHC’s enforcement strategy and powers and does not see a need to change these, unless evidence subsequently proves to the contrary
- The regulations will not be changed in respect of the information that has to be reported. This includes having additional information on the report such as disability. But if the current gender reporting does not change the behaviours of employers, the government will consider making changes but will ensure consultation with employers. The government response also points to ethnicity pay reporting and the fact that there was a consultation out on this
- Organisations with less than 250 employees will be encouraged to report voluntarily but the law will not change to require smaller employers to report. Small and medium employers could find this “particularly burdensome”
- There will be no changes to the law in respect of reporting partners in traditional partnerships and limited liability partnerships but the government recognises there are concerns in this area
- The government is working with representative bodies such as the Chartered Institute of Personnel and Development and the Chartered Management Institute regarding “best practice” on actually tacking the gender pay gap if it is identified. This is a priority and they will continue to engage with different representative bodies
- The government is clear that gender pay gap reporting sits with a number of different departments and says it is not appropriate for the Government Equalities Office to coordinate government policy
- Government departments will be looking at their own gender pay gaps if they exist and the Cabinet Office is developing a best practice guide
There are a number of things in this government response and the Global Payroll Association recommends reading it in full. Then reason is that this is a new policy and there are strong indications that it will be reviewed sooner than the 5 years the legislation requires. The good thing is that gender pay gap reporting remains unchanged – at the moment!