The Government has confirmed that the gender pay gap reporting requirements will not be extended to employers with less than 250 employees.
Current Gender Pay Gap Reporting Requirements
Currently, under the gender pay gap reporting requirements, employers with 250 or more employees must provide the required data once a year. The rules came into force on the 6th April 2017, and require the firms to publish the following data: the mean and median gender pay gap in terms of hourly pay, the mean and median gender bonus gap, the proportions of male and female employees who are paid a bonus, and the proportions of male and female employees who are in the lower, lower middle, upper middle, and upper quartile pay bands. In 2019, the gender pay gap data must be provided by public sector organisations with 250 or more employees by the 30th March 2019, whilst it must be provided by private sector and voluntary organisations with 250 or more employees by the 4th April 2019. The data must be published on the organisations own website, and on the Government website.
No Extension Of The Gender Pay Gap Reporting Requirements
Back on the 2nd August 2018, the Business, Energy and Industrial Strategy (BEIS) Committee published a report in which it called for the gender pay gap reporting requirements to be extended to all employers with 50 or more employees from 2020 onwards, on the basis that the evidence suggests that the gender pay gap "is greater in these smaller companies." The committee also called for companies "to provide some narrative reporting alongside their gender pay statistics and an action plan setting out how pay gaps are being and will be addressed, including objectives and targets. Subsequent report should report progress against this action plan, including targets set."
Nevertheless, the Government in its response to the Committees report has rejected its recommendations, including the recommendation to extend the gender pay gap reporting requirements to all employers with 50 or more employees. In its response, the Government stated: "The threshold to qualify for the regulations was consulted upon prior to their introduction. At that point, over half of respondents agreed with the 250 threshold. Given the range of metrics required, it was felt that reporting could be particularly burdensome for small and medium sized businesses and so the requirement should be restricted to large employers. As the Committee’s report recognises, there are several issues when it comes to the reliability of data from smaller organisations – especially for those firms with 50 or fewer employees. The reduced number of staff means their GPG figures are much more sensitive to small changes, e.g. staff turnover, pay rises, etc., compared to larger organisations. For example, the removal/addition of one staff member could change a firm’s GPG figure from positive to negative (or vice-versa)......Publishing an action plan was intentionally not included as mandatory requirement under the reporting regulations. While the Government urges all employers to produce an action plan alongside their figures, we were aware that including it as a mandatory requirement might result in a prescriptive format with limited value to employers and employees. By not making them mandatory, we have given employers the freedom to produce an action plan that is relevant to their individual situation which they can truly commit to and embrace."
Response From BEIS Committee
By way of response to the Government's decision not to extend the gender pay gap reporting requirements, the chair of the BEIS Committee, Rachel Reeves MP, stated: "Next year is the 50th anniversary of the Equal Pay Act, and yet still we are tackling issues around fairness in pay. The UK has one of the highest gender pay gaps in Europe. Pay reporting can only be the first step in closing this gap and moving towards genuine equality and diversity in the workplace. The Government’s refusal to extend gender pay gap reporting requirements to partners is disappointing and continues to make a nonsense of efforts to understand the true scale of, and the reasons behind, the gender pay gap in some companies. Failing to accept our report’s recommendation to require businesses to publish an action plan for closing the gap, against which they must report progress each year, suggests the Government are timid in holding businesses to account for their efforts in driving the change needed."
