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The 2015 Small Business, Enterprise and Employment Act (SBEEA) has amended The Equality Act 2010 to require employers with 250 or more employees (in the private or third sector) to publish details of their gender pay gap.
[Updated June 2017]
The Government started its preliminary consultation in July 2015 to look at what data organisations will be obliged to present and how, and finally responded in February 2016 by publishing the requirements for employers to report gender pay gap information and issuing a draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2016.
The draft Regulations are subject to further consultation which will close on 11th March 2016. In October 2016 it was announced that some significant changes may be made to the regulations which will bring more employers into scope of the reporting rules. The final draft of the Regulations was published on 6th December 2016 and the Regulations are scheduled to come into force on 6th April 2017. Government Guidance can be seen here.
What the new gender pay reporting will mean:
The Government have said that they will review the position after 5 years to determine whether other Employers should be bought in scope of the regulations.
Guidance and support for Employers is to be developed by the Government, to help them comply with these new requirements. We’ll update this article as things become clearer.
Employers may be concerned that this information may be used for equal pay claims against them. It is more usual at the moment for Equal Pay claims to be concentrated in the public sector, however these changes may mean more claims in the private sector.
Currently The Equality Act 2010 contains the previous legal framework that was in place for Equal Pay which means that in most circumstances a challenge to pay inequality and other contractual terms and conditions still has to be made by comparison with a real person of the opposite sex in the same employment (doing “like” work, “work related as equivalent” or “work of an equal value” to an employee of the opposite sex employed by the same employer or possibly an associated employer).
However, a change in the Equality Act 2010 allowed a claim of direct pay discrimination to be made, where no real person comparator can be found. This means that a claimant who can show evidence that they would have received better remuneration from their employer if they were of a different sex may have a claim, even if there is no-one of the opposite sex doing equal work in the organisation. This would be a claim under sex discrimination.
And a ruling by the Supreme Court at the end of June 2013 effectively handed women the legal right to demand the same pay as male colleagues doing a different job of ‘equal value’.
It is also worth being aware that in 2012, a landmark Equal Pay case delivered the verdict that workers now have 6 years (5 years in Scotland) to make an equal pay claim in the High Court (rather than 6 months to an Employment Tribunal).
The Equality Act 2010 also made it unlawful for an Employer to prevent or restrict their employees from having a discussion to establish if differences in pay exist that are related to protected characteristics (in the Equality Act) and outlaws pay secrecy clauses in contracts of employment.
An employer can currently require their employees to keep pay rates confidential from some people outside the workplace, for example a competitor organisation.
Will this have to change in light of the new reporting requirements? We’ll keep you updated!
If you are an Employer and need ongoing professional help with any staff/freelance issues then talk to Lesley at The HR Kiosk – a Human Resources Consultancy for small businesses – our fees are low to reflect the pressures on small businesses and you can hire us for as much time as you need.
Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative or current interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.
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Darren Fell, CEO of Crunch, said: "We welcome the government's commitment to adopt the recommendations from the Taylor report. We would however, urge caution that any response does not introduce more red tape, or reduce the ability for entrepreneurs to employ people flexibly."