Morgan McKinley have teamed up with XpertHR to discuss the very topical theme that is the Gender Pay Gap. Morgan McKinley provided some insight into the gender pay gap from a recruitment perspective and XpertHR explained the difference between the gender pay gap vs equal pay, new regulatory requirements for reporting on the gender pay gap for employees and how and why this can be done. Guest speakers: Mark Crail and Clio Springer.

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3. Reporting your gender pay gap
Clio Springer
Senior employment law editor
XpertHR
September 2017

4. Reporting your gender pay gap
• Overview
• Gender pay gap reporting vs Equal pay
• 250+ employees?
• Six metrics
• Important dates and terms
• Reporting
• Enforcement
• Specific points/queries

5. Overview
• Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 – in force 6 April 2017 (private
sector and charities)
• Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 – in force 31 March
2017 (public sector)
• Employers with 250+ employees must report annually on their gender pay gap and gender bonus
pay gap and publish this information.
• Requirement to report on six metrics. But employers can report more and break down figures.
• No requirement for narrative/explanation but consider benefit of including.
• Acas/GEO and GOV.UK guidance.
• XpertHR guidance and template.

6. Gender pay gap reporting v Equal pay
• GPGR – difference between average pay of male and female employees.
• GPGR – does not take account of role or seniority –> possible skew of results (importance
of narrative).
• Equal pay – pay differences between male and female employees carrying out the same
or similar work, work rated as equivalent, or work of equal value.
• Equal pay audit – comparing like with like.

7. 250+ employees?
• 250+ employees on snapshot date - 5 April (31 March in public sector).
• Headcount – not whole-time equivalent.
• Joiners and leavers during relevant pay period as long as employed on snapshot date.
• “Employees” – GPGR Regs don’t define but explanatory notes say same as Equality Act
2010 (wider than ERA 1996). Includes “contract personally to do work”.

8. 250+ employees?
• Agency workers – who is the employer?
• Employees working outside GB?
• Partners in firms if they are an “employee” - for determining whether employer has 250+
employees – but not used as part of calculations (excluded from definition of “relevant
employee” for those calculations).
• Contractors, consultants, zero-hours workers.

9. Contractors/Consultants
• Included for determining if employer required to report (ie has 250+ employees).
• But can be excluded from calculations if employed “under a contract personally to do work”
and employer does not have data and not “reasonably practicable” to obtain data.
• But – need to ask – is it really that difficult to obtain data?
Acas/GEO guidance suggests asking for it and making provision of this information a
requirement of new contracts.
• Sensible to record justification for not including.

10. Under 250?
• If close to 250 consider reporting anyway.
• May fall above threshold in future (or have done so previously), so reporting every year
appears more consistent and committed to transparency.
• Each report has to be published for at least three years so gaps may appear like an
omission.
• Easier to demonstrate any ongoing reduction in pay gap if report annually.

11. Six metrics
• % difference in the mean hourly rate of pay between male and female full-pay relevant
employees.
• % difference in the median hourly rate of pay between male and female full-pay relevant
employees.
• Proportions of male and female full-pay relevant employees in each of the four quartile pay
bands as a % of total full-pay relevant employees in the relevant pay band.
• % difference in mean bonus pay between male and female relevant employees.
• % difference in median bonus pay between male and female relevant employees.
• Proportions of male and female relevant employees who received bonus pay.

12. Important dates and terms
• “Snapshot date” – 5 April 2017 and every subsequent 5 April for future reports (31 March
public sector): Date for assessing if employer is in scope and date for capturing pay data.
• Relevant pay period – pay period (eg monthly, weekly) that includes the snapshot date.

13. Important dates and terms
• Relevant employees – used for all six calculations = employed on snapshot date.
• Full-pay relevant employees – used for mean and median pay reporting and quartile pay
bands = relevant employees who are not on reduced or nil pay due to being on leave,
during the relevant pay period.
• “Relevant period” – for purpose of bonus pay reporting – 12 months ending with
snapshot date – so starts 6 April 2016 and every subsequent 6 April for future reports (1
April 2016 public sector): First date from which bonuses must be included.

14. Hourly rate of pay – includes ordinary pay
Hourly rate of pay – used for mean and median pay gap calculations and quartile pay bands.
• Includes ordinary pay (before deductions) in the relevant pay period (basic pay,
allowances, piecework, pay for leave, shift premia).
• Does not include overtime, redundancy or termination payments, expenses, pay in lieu of
leave, or remuneration that is not money (BIKs).
• Does not include ordinary pay that would normally be paid in a different pay period
(including arrears, overpayments) - so need to strip this out.

15. Hourly rate of pay – includes bonus pay
• Includes bonus pay paid in the relevant pay period (money, vouchers, securities, for profit
sharing, productivity, performance, incentive or commission).
• Bonus pay – contractual and non-contractual.
• Pro-rate a bonus if it represents a longer period than the relevant pay period. (But include
whole bonus if not related to a time period.)
• Apply calculation in Regs to arrive at an hourly rate of pay. (Acas/GEO guide.) Therefore
no need to calculate a FTE pay rate for part timers.

16. Bonus pay metrics
• % difference in mean bonus pay between male and female relevant employees. Mean is
calculated from the numbers receiving a bonus.
• % difference in median bonus pay between male and female relevant employees. Median
is calculated from the numbers receiving a bonus.
• Proportion of male and female relevant employees who received a bonus.

17. Bonus pay metrics
• All “relevant employees” on snapshot date – includes those on leave on reduced or nil
pay.
• Include all bonuses from the relevant period (12 months up to the snapshot date).
• What counts as a bonus is the same as for pay calculations but no account taken of
number of hours or apportioning.
• Include part-timers’ pro-rated bonuses. (Don’t convert to FTE.)

18. Reporting
• Annually
• By 12-month reporting deadline from snapshot date – so by 4 April 2018 and every
subsequent 4 April (30 March public sector).
• But can report earlier – consider benefits of this.
• Signed by a prescribed senior person (eg director if a corporate body) – confirming the
information is accurate.
• On own website for three years.
• On GOV.UK website
https://www.gov.uk/report-gender-pay-gap-data

22. Enforcement
• No enforcement measures or penalties in Regs.
• Explanatory notes – failure is an “unlawful act” under Equality Act 2010 so EHRC can take
action.
• But legislation not clear that the Regs come within this.
• Consider reputational damage.
• Government keeping under review.

23. Reporting your gender pay gap
Mark Crail
Content Director and Head of Salary Surveys
XpertHR
September 2017

24. Where are we now?
4,000 employers need to report their GPG
(source: GEO impact assessment)
By January 2017…
• 39.9% had carried out a trial run of the calculations
• 35.5% expected to have done so by April
(source: XpertHR survey of UK employers)
As of Monday, 67 had uploaded reports to the government
website

25. Reporting your gender pay gap
• Why you should go beyond the legal minimum
• What else you might consider reporting
• Communicating about the gender pay gap

26. The legal minimum…

27. What employees will see…
‘My employer
pays men 25%
more than
women!’‘Surely it’s illegal’ ‘I’m going to find
another job’
‘That’s
outrageous’
‘I feel really
undervalued’
‘That bloke does
the same job as
me – but I bet he
gets paid more’
‘That’s the last
time I put myself
out for them’
‘Employment tribunal here I come!’

28. It’s all about your reputation
• With employees
• Who may be demotivated, less productive and more likely to leave
• With potential job applicants
• Who may go elsewhere
• With your peers
• Competitors looking for advantage
• With other key stakeholders
• Trade unions and staff councils
• Investors and customers

29. The bare numbers tell a story
If you don’t tell your own story,
someone else will
(and it may not be a story you
want people to hear)
The claims of Company X to be an equal
opportunities employer are in tatters after
data released by its own HR department
revealed it pays men an average 10%
more than women…
A major equal opportunities drive by
Company X is proving successful, with
the pay gap between men and women
now just half that found in other parts of
the industry…

30. Taking control of the story
What employees will want to know…
‘What is this all about?’
‘Is this the same as pay inequality? What’s the difference?
‘What has the company being doing about it?’
‘Are we worse than other companies like ours?’
‘How did it get like this?’
‘What are we going to do about it in future?’
‘Percentages are confusing? What does this mean in £££?’
‘Has it always been like this or are things getting worse?’
‘Why are we paying men more than women?’

31. Taking control of the story
The government website won’t help you

32. Narrative
What is gender pay gap reporting?
Why are you reporting this data?
Why now?
How does it differ from pay inequality?
What influences the gender pay gap
industry-specific factors
history

33. Additional data
Benchmarks – how do you compare
whole economy
broad sector
industry
£s as well as %
More detailed breakdowns
by seniority
company divisions
excluding distortions

34. Actions
What has the company being doing?
do you have an equal opps policy?
what progress have you made?
What will it do in future?
are you rethinking in light of this data?
Are there targets?
what does success look like?

35. What should a GPG report look like?
There is no official template
Options include
• standalone page on your website
• downloadable PDF
• as part of your annual report
Think about your audience

36. What should a GPG report look like?
Good practice examples
Greenvale AP Ltd Succinct, keeps it simple, offers
an explanation
Interfloor Ltd Analyses reasons and offers an
action plan
Deloitte Sets GPG in context of wider equality and
diversity strategy
Three different reports – but each appropriate for
its likely audience

37. Interfloor Ltd

38. Deloitte

39. So now I just upload it…
You need a plan for
• The board
• Managers
• Your workforce
• Other key stakeholders
• The wider world – not least potential job applicants
• Materials
• model PowerPoint, FAQs…
Who will deal with feedback?

40. All done – tick it off the list
And then next year you do it all again…
and the next year…
and the next year…
This is an annual exercise, and once published your report must
remain on your website for three years

41. A final thought…
Be careful of over-promising
If you explain away half your gender pay gap and promise to
eliminate the rest,
this time next year you will have to explain why it didn’t happen

42. Useful resources
Report your gender pay gap – government website
See other people’s gender pay gap reports – government website
XpertHR resources
• Gender pay gap reporting service
• Gender pay gap resources
• How to… guide, Model report, Legal guidance etc
• Gender pay gap FAQs and answers (free resource)
• On-demand gender pay gap webinar
GPGs by industry – Office for National Statistics annual survey of hours and earnings

43. Specific points/queries

44. Bonuses and part-timers
• For bonus pay calculations - requirement to include part-timers’ pro-rated
bonuses and not convert to FTE.
• Means pro-rated bonuses for part-timers may bring female bonus figures
down.
• Reflect this in narrative.

48. Leavers and joiners
• For pay gap reporting:
• Regs do not account for employees who are employed on the snapshot date but join or
leave part way through the relevant pay period that includes the snapshot date.
• Hourly pay is based on what employee actually earned during the relevant pay period,
against “normal weekly hours” (what he or she would have worked in a week, under the
contract).
• Therefore hourly rate will be lower than it should.
• Account for this in the narrative if gender pay gap is distorted.

49. Transgender employees
• Generally use gender identities on records.
• But records may be unreliable and may not match how some employees identify.
• Could use GPGR requirements as reason to invite employees to update records.
• Employees who do not identify as either male or female – this is not covered in Regs but
Acas/GEO guide says employer can omit from calculations.

50. Salary sacrifice
• Regulations – “ordinary pay” does not include “remuneration provided otherwise than in
money”.
• Acas/GEO guidance – clear that value of benefits provided under salary-sacrifice
arrangement do not count as “ordinary pay”.
• Use gross pay after reductions for salary sacrifice – even if voluntary.

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