Gender Pay Gap Reporting: What you need to know
Gender Pay Gap Reporting: What you need to know
The gender pay gap reporting deadline is 4 April each year for private sector businesses, Gender pay gap regulations require private sector employers with more than 250 employees at company or entity level to publicly report a range of gender pay information and ratios by 4 April every year. Different dates apply to public sector employers, who must report by 30 March every year.
It is already illegal to pay women less on average than their male counterparts, but differences in gender representation at different levels of an organisation can create a gender pay gap.
Understanding what data you need to include in a report, how, where and when to report the information, and preparing an effective ‘narrative’ are just some of the challenges of gender pay gap reporting. It can be a complex process and it is critical to get it right – missing the deadline or reporting inaccurate figures can impact your business’ reputation.
This is an evolving area with the Government intending to extend gender pay gap reporting to include ethnicity and disability, read more here.
Get help with your gender pay gap reporting
Our expert team can help with all parts of your gender pay gap reporting, providing a tailored service depending on your business’ needs. If your gender pay gap needs addressing once your report has been compiled, we can also help you to implement policies that will address your gender pay gap.
How to calculate your gender pay gap
To calculate your gender pay gap, you will need to start with two key figures: hourly pay rates for the Relevant Pay Period, usually April, and Bonus Pay for the previous tax year. ‘Pay’ includes basic pay and allowances, while ‘Bonus Pay’ covers what are usually irregular payments such as commission, profit sharing and most forms of equity. You will need to extract, clean, and analyse your data, as employee groups can vary for each calculation. In some cases, employees can be excluded, in some you will need to pro-rata or average pay, and you will also need to take into account any non-working weeks.
From these, you can derive the necessary ratios for the gender pay gap report. If you have a complex organisational structure, or workers with variable hours contracts, it can be a very nuanced and difficult calculation. If you have particularly complex pay structures, it would be best to seek expert help to avoid mistakes and reputational risks.
Which organisations need to report gender pay information?
Any organisation that employs 250 or more people on the Snapshot Date of 5 April every year, must submit a gender pay gap report by 4 April the following year. The report should include only those employees that are employed on the Snapshot Date. If your organisation has fewer than 250 employees on the Snapshot Date, you can still submit your gender pay gap information voluntarily. Being transparent about your gender pay gap demonstrates your commitment to equality and openness, no matter the size of your company.
What happens if we don’t file a gender pay gap report?
Failing to accurately report gender pay information could result in your business being ‘named and shamed’ by the Government Equalities Office. If you fail to address the gender pay gap in your business, it can potentially damage your reputation and adversely impact your staff recruitment and retention. Your organisation’s position on equality, diversity and inclusion is increasingly important when talent is deciding whether to consider employment and developing a career.
Investors are also likely to pay attention to your gender pay gap – if you are not transparent with your data, fail to submit a report or publish your data late, all of these may be red flags for potential investors.
How do I submit gender pay information and where will it be published?
Your gender pay report must be submitted online at the Government’s gender pay reporting website. The report must also remain available on your organisation’s website for a minimum of three years. You can publish the optional ‘narrative’ that will explain to stakeholders the reasons behind any gender pay gap and what steps you are taking to address it on your own website and a link to this can be provided on the Government’s gender pay reporting website.
Your accompanying narrative could be just as important as the data in your report. The narrative can often be overlooked because it’s voluntary, however, it can be a very useful tool for employers in explaining why a gender pay gap exists and what the business plans to do in the future to reduce any gap.
Since it will be publicly available to anyone who wants to read it, this includes your employees, and therefore we advise you to consider carefully how you communicate your gender pay figures and narrative both internally and externally.
If this is your first year preparing gender pay gap figures, you may find it useful to also prepare your previous year’s figures so that you have data to make a comparison and ascertain whether you are improving the gap, even though the earlier year is not reportable.
Who is responsible for my company’s gender pay gap report?
Your gender pay gap report will need to be signed off by a senior employee, usually a named director or equivalent. However, preparing the report and the accompanying narrative is likely to require input from some or all of HR, payroll and reward and even corporate communications teams.
Who can be excluded from gender pay gap reporting?
Understanding the rules around who can and cannot be excluded from your gender pay gap reporting and how to interpret your data to provide meaningful insights into your gender pay gap can be very complex. Part-time employees, contractors, employees on maternity leave, non-binary employees and internationally mobile employees can all be subject to special rules. If your business has a lot of part-time or international employees or contractors, it would be best to get specialist advice on your report.
Impact of the European Union's Pay Transparency Directive
In March 2023, the European Parliament voted in favour of adopting the European Union’s Pay Transparency Directive, aiming to narrow the EU gender pay gap through a number of measures to embed pay transparency. This includes the recruitment process, information employees can request, reporting on a broader scope than just gender reporting and being required to take corrective measures in certain circumstances.
The Directive will be transposed into national law by March 2026 with gender pay gap reporting application applying from 2027 onwards. Since the UK is no longer part of the EU, the new legislation will not apply to UK companies, unless they are a UK registered business with operations in EU member states - in which case, they will be required to comply with EU reporting requirements in the relevant country for those operations.
Although the UK was an early adopter of gender pay gap reporting, we now lag behind a number of European countries who impose stricter reporting parameters or action plans. It is likely that the UK will eventually follow in the EU’s footsteps and enforce more stringent regulations - so by setting systems up now to align to requirements of the EU Pay Transparency Directive, your business can get a head start.
From 2027, for businesses with a global footprint, they may not wish to navigate different requirements in different countries and so may want to take a ‘one-business’ approach to gender pay gap reporting by benchmarking all gender pay gap reporting by reference to the most stringent of requirements according to the countries they operate in, and this may need some explaining in the context of the UK figures published.
How to address your gender pay gap
If your organisation has a significant gender pay gap, it is best to tackle it head on. We will always advise you to question how your current policies could be contributing to the problem.
For example, the career progression of working mothers can have a big impact on the gender pay gap - often referred to as the “motherhood penalty”, so it may be necessary to focus on return-to-work policies, maternity and paternity leave policies in your organisation. When properly structured to support career progression and return to work after extended periods, these policies can have a significant impact in reducing your gender pay gap.
If you are unsure of the root cause of your gender pay gap, an expert analysis of the data and where the gender pay gap sits within an organisation can help determine where your energies need to be focussed to reach equality.
Get help with your gender pay gap reporting
Our specialist team can provide bespoke support for your organisation’s reporting obligations – whether you are not clear if you should be reporting, need your data validated or want to outsource your reporting entirely, we are here to help. You can rely on our expert team to assist with all parts of your gender pay gap reporting, providing a tailored service depending on your business’ needs.
We can advise on what data you should be including in your report, accurately process the information and help prepare the narrative that accompanies your report. We can also verify your processes and information to ensure that your compliance and that your data is accurate.
If your gender pay gap needs addressing once your report has been compiled, our experts can help you to explore and implement policies that will address your gender pay gap.
