Updated Draft Gender Pay Gap Regulations Published
The long awaited draft regulations were published yesterday – with some distinct changes compared with the first draft. You can read them here.
Whilst the new draft regulations clarify some points around who is caught (for example, partners do not fall within the definition of employee), and set out explanations of how to calculate the metrics required, new uncertainties have now been introduced. We hope that these will be rectified as the Regulations go through Parliament, but this may mean further changes before the Regulations are finalised.
We have set out below some key points from the new draft Regulations, but watch out for more detailed guidance from us on this:
- The snapshot date for reporting is now 5 April.
- Any employees who are on leave as at the snapshot date (whether holiday, sick leave, family leave or "special" leave) are not to be counted for the purposes of calculating mean and median hourly pay figures.
- An additional metric needs to be reported on – median bonus pay (in addition to mean bonus pay).
- The definition of "employee" is unclear in the Regulations and does not clarify whether employees outside Great Britain are included. The Explanatory Notes imply that the Equality Act definition of "employee" would be used. This is a broader definition of employee and includes workers and some self-employed individuals. It may also mean that the intention is to use the territorial limitations on protection under the Equality Act as defining which employees are caught by the Regulations – i.e. those where there is a sufficiently close link between the employment relationship and Great Britain. However, this is unclear.
- There are new exceptions allowing employers not to report data (in relation to employees employed under a contract personally to do work, and where the employer does not have the data). However, the circumstances when these exceptions would apply are unclear.
- Whilst there is no enforcement mechanism in the Regulations, the Explanatory Notes state that compliance with the Regulations will be enforced by the Equality and Human Rights Commission as any failure to comply with the Regulations will be treated as an "unlawful act" under the Equality Act.
The lack of clarity in the latest iteration of the Regulations is frustrating, particularly for employers trying to determine whether or not they will be caught, and for those who are already trying to prepare for reporting. We will be providing further guidance on the Regulations and if you would like to speak about how this affects your organisation, do contact a member of the Employment Team.