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. Response Government continue to urge organisations with fewer than 250 employees to publish their data voluntarily, and several employers under the threshold did report last year. Given the range of metrics required, at the time of consultation 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. Government will still encourage smaller firms to look at their gender pay gaps, to ensure there is fair representation of men and women at all pay grades in the organisation and it will also continue to support organisations of all sizes, both with the reporting process and efforts to tackle their gaps, encouraging them to use the ‘what works’ guidance. Should there be sufficient appetite for lowering the threshold in future reporting years, government will consult with potentially affected stakeholders on the feasibility, and advantages and disadvantages of extending the regulations. Recommendation That the Government uses the guidance to clarify how data on partner pay should be calculated and included in time for the publication of data next year [2019].
Response
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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