Recommendation That the Government reviews the gender pay gap reporting requirements with a view to aligning them with other business reporting requirements from next year. Response Government recognise the Committee’s concerns about the burden posed by different requirements on business and are working with several Government Departments to align requirements as much as possible. Given the range of organisations within the scope of the regulations, there is not another common reporting requirement that would logically align with gender pay gap publication and government has therefore focused on balancing transparency of data with flexibility for employers. The reporting regulations were designed so that employers have flexibility on when they publish their data, giving them a full year after the snapshot date so that they can report at any time, in line with their own internal processes. Recommendation That organisations are required 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 reports should report progress against this action plan, including targets set. Response Government estimate that approximately 48% of employers have published action plans alongside their figures in the first year of reporting and will continue to encourage all organisations to do so in future years. Government will continue to engage with employers and their membership bodies to provide best practice guidance on constructing an action plan. 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, it is aware that including it as a mandatory requirement might result in a prescriptive format with limited value to employers and employees. With the first year of gender pay gap reporting completed, employers can view the diverse range of action plans produced by organisations on the Government portal to assist with their own action plans. Recommendation That when the Regulations are amended, the requirement for information on salary quartiles is changed to deciles and that both part-time and full-time gender pay gap statistics are required to be published. Response Government already encourage organisations to produce any metrics which they believe will help them understand their gap, in addition to those required by the regulations. Legislation already includes a requirement to review the extent to which it is achieving the intended objective after five years, however government will continue to consider potential improvements to the reporting requirements and would consider whether any extensions should be introduced in a shorter timeframe. Any changes would have a subsequent impact on the comparability of the data year on year, and between organisations. Prior to any amendments there would be a period of consultation with employers and membership bodies. Recommendation That when the Regulations are amended, the way in which bonus calculations are made is altered so that it is on a pro-rata basis and that this change is accompanied by the publication of clear guidance on the method of calculation. Response The topic of bonus calculations was raised within the original consultation on the regulations and was covered in the Government response at the time. The decision was a conscious choice as the current metrics ensure that a person’s working life is looked at in the round. If government were to allow for pro-rata bonus payments, this would fail to expose where earnings differ on account of working patterns, a key contributing factor to the gender pay gap. The employee threshold, the overall gender pay gap calculations and earnings quartiles are all based on headcount rather than full-time equivalent. Therefore, as the bonus calculation is made on the same basis, it adds more detail to the picture of how much women are paid in the organisation. On a practical level, if a gender bonus gap has been skewed where a percentage bonus has been paid to full-time and part-time employees, government would encourage employers to highlight this in their accompanying narrative. There is also nothing to stop employers from publishing additional metrics within their action plan alongside those required by the regulations. Recommendation That the qualifying threshold remains at 250 employees next year [2019], but the following year be reduced to organisations of 50 employees or more.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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