Final gender pay consultation review clarifies mobile worker coverage

Ahead of the planned introduction in April 2017 of mandatory gender pay gap reporting, the government has published its final response to February’s draft consultation, with clarification for mobile workers.

Image of bench at Cannon Street Station with the bench plaque to gender pay gap

Copyright: steelashan via Flickr

The Mandatory Gender Pay Gap Reporting response will be put before parliament “at the earliest opportunity,” with the government restating its commitment to introducing the regulations.The new gender pay gap regulations will cover nearly half of the total workforce. Companies employing 250 or more will fall under the legislation’s scope, with separate measures coming into force for certain public authorities.

Mobile workers and gender pay audits

Clarifying the situation on reporting for group and multinational organisations that have multiple UK companies, the government has opted to for the reporting requirements to apply to each separate legal entity (ie the employer) with at least 250 employees within a group structure.Given the current debate on the nature of the employment relationship and the gig economy, and for mobile employees not based in the UK working here, the response also adds detail.It confirms zero-hours contract workers will be covered by the legislation, as would agency workers (with the company they had a contract with, generally the agency). Workers who are not based in Great Britain, but still regarded as being employees of employers within the regulations’ scope, could also be included in the data because of “a strong connection with Great Britain.”Following the consultation, which ended in February, policymakers have shifted the “snapshot date” for capturing hours and employee earnings from 30 April to 5 April. This is to better tie in with tax years and bonuses. The full report details the consultation responses and all the government’s final draft of the legislations.

Equal pay v gender pay gap?

Responding to the government’s focus on gender pay gap reporting, global consultants in talent, health, retirement and investments Mercer said it believed the regulations could go further, and that UK companies will need to go beyond reporting to fully explain gaps and drive change.Mercer points out many organisations are worried current and future employees will see a gender pay gap as reflective of women being paid unequally. The pay gap measure provides little insight into whether men and women are paid the same for the same work, which is covered by equal pay legislation, notes Mercer.

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Gender pay gap reporting too blunt?

“We welcome the government’s focus on the issue and it is clear that it is getting the attention of businesses,” said Chris Charman, reward expert at Mercer. “The regulations bring with them a great starting point for employers to improve their workplace gender balance. Mercer’s When Women Thrive global research from 700 employers point to a number of practices that enable women and workforces to thrive and prosper.However, Mr Charman voices his concerns that the new reporting requirement means “quite a blunt series of statistics that in themselves do not give the employer any insight.” Instead, employers need to focus on understanding what drives their gender pay gap.“Employers will need to demonstrate for themselves that they are paying fairly and that the gap is not down to unequal pay,” said Mr Charman. “The first step for organisations must be to ensure their pay and bonus programmes do not discriminate and then look into the deeper causes of any gaps.” Mr Charman continued, “In companies we have worked with, the gap can often be explained through workforce issues, including lack of female career progression or women’s low representation in technical or specialist roles.“Although employers are concerned about equal pay cases, their biggest fear and risk is one of reputation. Beyond reporting, organisations will need to engage in a strong communication exercise with current and future employees to explain the past but also set out how they will change and close the gap.”

For related news and features, see our Human Resources section.

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