The gender pay gap reporting deadline for 2022 passed on the 30 March 2022. The next deadline will be the 31st March 2023. So why are we bringing this up now?
This report is only applicable for organisations (including schools/academies) with 250 employees or more. Pulling the data together for this report is no small task and can often leave finance departments and school business managers scratching their heads asking “where do we go from here?”
We receive many phone calls asking: What is the purpose of this report? What are the obligations placed on the organisation? Where do I even start? Is it too late to book a holiday for the end of March?!
Why? Oh Why?!
The gender pay gap continues to fuel many debates and in an effort to increase consciousness and improve pay equality, the UK government introduced plans to “end the gender pay gap in a generation” by requiring British employers in the private and voluntary sectors to report the gender pay gap for organisations with 250 or more employees.
Does the Gender Pay Gap report achieve anything?
In a word, yes! The NAHT reviewed the Gender Pay Gap across education in 2021 and found that “males earned on average 2.4% more at classroom teacher level, but 11.3% more (on average) than women head teachers”. There are limited, very limited, occasions where the pay gap favours women, unfortunately the largest pay gap favouring women was £892 in classroom teachers in primary academies, yet the largest gap in favour of men was £4,165 (headteachers in special/PRU settings).
Isn’t gender pay and equal pay the same thing?
NO! – Gender pay gap reporting should not be confused with the issue of the equal pay gap. While the latter concerns itself with the ‘like for like’ differences in the rates of pay between men and women in the same or similar role; the gender pay gap looks at the difference in the average earnings of men and women, regardless of their role or seniority. It is, therefore, a broader measure capturing not just any equal pay issues within an organisation, but also any pay inequalities resulting from differences in the sorts of jobs performed by men and women and the gender composition of the workforce by seniority.
What goes in the report?
The gender pay gap is defined as the difference in median pay between men and women. Organisations caught by the rules will have to publish the following statistics (figures for gross pay should be used in all cases):
- Average women’s hourly earnings as a percentage of average men’s hourly earnings (based on both the mean and median average)
- Average gender pay gap as a mean average (ACAS)
- Average gender pay gap as a median average (ACAS)
- Average bonuses for women as a percentage of average bonuses for men (based on the mean average)
- Average bonus gender pay gap as a mean average (ACAS)
- Average bonus gender pay gap as a median average (ACAS)
- The percentage of women who receive bonuses and the percentage of men who receive bonuses
- The number of male and female employees in each quartile of the employer’s pay distribution (based on rates of hourly pay) (proportion of males and females when divided into four groups ordered from lowest to highest pay)
What if I have employees who do not identify as male or female?
If an individual has expressed or you are aware, that they do not identify with their birth gender, current government guidance is that their data be omitted from the report. Currently Gender Pay Gap Reporting only legislates for those who identify as Male or Female. You will need to confirm if any employees fall under the category of “other”. Although it is something that many will not agree with, as all employees should be included in the report – you need to follow the guidance to the letter to ensure you have an accurate and compliant report.
Mean and Median?
The ‘mean average’ refers to the average of the numbers (to calculate the mean add up all the numbers and divide by how many numbers there are).
The ‘median average’ refers to the middle number in a sorted list of numbers (to find the median place all the numbers you are given in value order and find the middle number).
You can report your figures to government as either whole percentages or percentages rounded to one decimal place.
Full-Pay Relevant and Relevant Employees?
Relevant employees are defined as “all employees employed by the employer on the snapshot date of a given year, except for partners.
Relevant employees also include those identified as full-pay relevant employees and all other employees employed on the snapshot date but on less than full pay because of leave.
Full-pay relevant employees are defined as “any employee who is employed on the snapshot date and who is paid their usual full basic pay (or pay for piecework) during the relevant pay period” Regardless of an employee working hours/working pattern, as long as they have received their usual full basic pay for the relevant pay period, they will be included as a full-pay relevant employee.
If an employee is paid less than their usual basic pay or piecework rate, or nil, during the relevant pay period due to leave (maternity, paternity, adoption, shared parental leave, special leave and sickness leave) their data will not be included in this section.
If an employee is paid less than their usual basic pay or piecework rate for any reason other than leave (i.e., strike action), they will still be classified as a full-pay relevant employee.
What is included in “pay”?
When working out the gross hourly rate of pay for an employee, overtime, expenses, benefits in kind and the value of salary sacrifice schemes should not be taken into account. At the same time, shift premiums, on call and standby allowances will have to be included. Reduced pay, for example where an employee is on sick leave or maternity leave, should be used in the calculations rather than the normal contractual rate of pay.
What about employees on zero hours and casual workers contracts?
Employers should include staff on zero hours contracts in the calculation of their gender pay gap if they meet the relevant definition of an employee. Where employees do not work the same number of hours each week, organisations need to calculate an average over the 12-week period that ends with the last complete week of the relevant pay period.
If the 12-week period includes a week where no work was done, organisations should choose an earlier week where work was done and use this instead as part of the average calculation. If you can’t reasonably use the 12-week average (for example because the employee has not been at work for long enough), use a number which fairly represents the employee’s weekly working hours.
Action points for schools
Although only larger independent schools are currently caught by the legislation, it is advisable for academies, academy trusts and maintained schools with around or over 250 employees to prepare to make the report.
- All school employers should work out the number of relevant employees they have (including considering which members of staff are “employed under a contract of employment”).
- Schools which are under but fairly close to the 250 threshold should consider seeking legal advice on this point.
- Schools with 250 or more relevant employees may wish to carry out a “dry run” analysis of the figures. This will help to uncover tricky aspects to the calculations. Schools will also have forewarning where the gender pay gap is significant and may need addressing on a strategic level.
What if it all goes wrong or I don’t report?
It is a legal requirement for all employers who are required to report and publish their gender pay gap information to accurately report this information. Failing to do this within one year of your snapshot date is unlawful. It is your responsibility to determine if you must report gender pay gap information.
The Equality and Human Rights Commission has the power to enforce any failure to comply with the regulations
Penalties for failing to report
Employers that fail to report on time, or report inaccurate data, will be in breach of the regulations and risk facing enforcement action from the Equality and Human Rights Commission (EHRC), leading to court orders and fines.
Reputational risk for failing to report
You may also run a reputational risk to your employer if you fail to report and publish your gender pay gap information. In many cases the suspicions behind why an employer failed to publish their gender pay gap could have a negative impact and be far worse than what would have been shown by the report.
The Gender pay gap service applies publicly visible ‘late badges’ to employers registered within the service and have failed to report and publish their gender pay gap information for any year they are required to do so.
Further details of the EHRC enforcement strategy
Do I have to say why the Gender Pay Gap is so high?
No, there is no obligation under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (SI 2017/172) on employers to publish an explanation of their gender pay gap figures. However, we would always recommend that there is some explanation given as to why the GPG is so high or low. It is also best practice to publish your methodology for the report so you can justify your report findings.
Schools should be aware that a request could be made under the Freedom of Information Act and that the underlying salary information and calculations are likely to be disclosable.
The legal employer must report and publish their gender pay gap data.
The necessary information must be published as a written statement by an appropriate person, on their public-facing website accessible to employees and the public. It must remain on the website for a minimum of three years. Employers must also report their data to government online – using the gender pay gap reporting service. (https://www.gov.uk/report-gender-pay-gap-data )
All the information you require throughout the year can be stored in a HR system, making it much easier to pull the necessary information. We are currently even adding a gender pay report to our holistic HR system SAMpeople in order to make
this even easier. If you would like to see the system in action, book a demo. If you would like to know more about Gender Pay Reporting, register for our webinar. You can book your free place online here.
If you need any help or advice in the meantime, please speak to your HR consultant or give one of our team a call on 01924 827869.
