Private and third sector employers with at least 250 employees will now have their pay gaps highlighted under new legislation. Employers will need to publish an annual report – and whilst the plans may change, under current proposals they will need to start compiling the information from 30 April 2017, a year ahead of the information coming into the public eye.

In Britain last year, the gender pay gap was 9.4% for full-time employees – this rises to 19.2% for all employees because a higher proportion of women work part time (41% compared with only 11% of men). The figures are affected by the proportions of men and women in different roles, and vary across age groups. The Government believes the move will encourage pay parity and voluntary schemes attempted in the past have been ineffective. 

10 key gender pay gap facts to be aware of

  • Employers will have to publish information on their websites annually.
  • Organisations need to cover their employees ordinarily working in Great Britain in their reports.
  • The newly published legislation is still in draft and may change before it is brought into force on 1 October 2016.
  • While the legislation currently applies to the private and third sector, it's expected to be extended to the public sector in the near future.
  • The term 'employee' will be defined as anyone with a contract personally to do work – not just people with a contract of employment.
  • Employers must also report on their bonuses to employees. There are specific requirements on what information will need to be calculated, read our longer note here for the detail.
  • There will be specific rules on shares and other long term incentives.
  • There is no requirement currently to break information down by age.
  • Larger organisations might be able to argue they are out of scope, if employees are engaged by different entities and no one entity has more than 250 employees. However the final regulations may remove this possibility.
  • There are no direct penalties planned for non-compliance. However, clearly failure to comply (or the existence of large pay gaps) may affect organisations' ability to attract good candidates, or in their success in tender situations. Read more about this in our fuller briefing.

We will publish some more information once the legislation is finalised, and in the meantime do speak to any member of the employment team. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.