On 2 August 2018 the House of Commons Department for Business, Energy and Industrial Strategy (BEIS) Committee published a Gender Pay Gap Report as the first tranche of the Committee’s inquiries into aspects of executive pay and gender pay gap in the private sector. The Government has recently responded to the report which has now been published.
Firstly, the Government will not be extending the gender pay gap reporting obligations to companies with 50 or more employees, despite, the Government being enthusiastic in the encouragement for smaller companies to strive for fair representation of men and women at all levels and pay grades, the Government refuse to make it a requirement.
Secondly, the Government is keen for all employees to produce an action plan in future reporting years are being encouraged to publish their plans (which is central to Government Equality Office work). However, the Government refuses to make this a mandatory obligation and would rather allow employers the freedom to produce an action plan that is relevant to each situation to truly commit and embrace the issues.
Furthermore, partner remuneration was recommended as an inclusion in the central figures, currently partners in traditional partnerships and LLPs are excluded. While the Government welcomes organisations voluntarily publishing their data the Government do not accept the recommendations. Acknowledging that it will review the situation in future and the possible introduction of a voluntary reporting methodology.
Recommendations to amend regulations to include tenths rather than quarters in order to engage a more nuanced analysis and require employers to show part-time and full-time gender pay gap statics separately. The Government has again not accepted these amendments as they wish to consult with employers and membership bodies first.
The Government were asked in the report to clarify areas of ambiguity and publish fresh guidance on areas such as; how bonus figures are calculated. However, the Government have declined on creating new guidance on the basis they continually assess the current guidance jointly provided by ACAS and Government Equality Office and are content with their stance on this.
Moreover, the report acknowledged the possibility of extending the collection and reporting of pay gap data to include disability and ethnicity, in time for a 2020 publication. A Government consultation is already underway in respect of ethnicity, but no timeline has been set. The Government has set out plans to establish a framework for voluntary reporting on mental health and disability for larger employers. But no claim for a mandatory requirement on a business.
The Government are happy with EHRC enforcement strategy, providing enough certainty to employers in terms of non-compliance consequences. Positively 100% employees who fall under the category have published their information.
Clearly, there is no appetite for the Government to make changes to the gender pay gap reporting regime after just one full cycle of reporting, especially as employers are still getting used to this new regime. It looks more likely that if any changes were to take place it will be in 5 years when it is scheduled to be reviewed.
