The gender pay gap (GPG) is the difference in the average hourly wage of men and women across a workforce. The Gender Pay Gap Information Act was enacted in 2021. The Act requires organisations to report on their GPG across a range of metrics. Organisations with over 250 employees have been required to report annually on their GPG since December 2022.
We previously wrote about the GPG reporting obligations under the Employment Equality Act 1998 (section 20A)(Gender Pay Gap Information) Regulations 2022 (the 2022 GPG Regulations).
The 2022 GPG Regulations were updated in May 2024 by the Employment Equality Act 1998 (section 20A) Gender Pay Gap Information (Amendment) Regulations 2024 (the 2024 GPG Regulations). The GPG reporting obligations have now been extended to employers which employ 150 employees or more. Relevant employers will be required to produce a GPG information report by a date in December 2024, six months after a snapshot date in June chosen by the employer.
GPG reporting obligations will be further extended next year (2025) to organisations which employ 50 employees or more.
Key changes
Other key changes introduced by the 2024 GPG Regulations include:
- Share options and interests in shares should no longer be treated as bonus remuneration. Instead, they should be included as benefits in kind. In theory, this should simplify calculations, as employers will only have to calculate the percentage of male and female employees who received these types of benefits in kind, and not assign a monetary value to these benefits in kind.
- There has been a slight change in the formula used to calculate the total number of working hours for employees whose working hours are not fixed or differ from week to week. This appears to reflect the fact that 2024 is a leap year.
- Helpfully, a new definition of “basic pay” has been introduced. This new definition clarifies that payments made to employees on maternity, paternity, adoptive and parent’s leave, including both the relevant State benefit and any “top up” amount paid, should be included when calculating basic pay. The Government has published an updated FAQ document for employers on GPG reporting, which advises that where employers do not pay a top-up to employees, they should report on the State benefit that the employee is paid.
There is still a six-month deadline for organisations to report on GPG for 2024 after the snapshot date in June. However, from 2025 onwards, it is anticipated that there will be a five-month deadline to report after the snapshot date, i.e. a November 2025 reporting deadline.
Currently, GPG information must be published on the relevant organisation’s website, or in some other manner that is accessible to all its employees and to the public, and for a period of at least three years. While there remain plans for an online, central reporting system to be developed by the Department for Children, Equality, Disability, Integration and Youth, this is unlikely to be in place for the 2024 reporting cycle.
Conclusion
For employers reporting on their GPG for the first time in 2024, they should:
- Familiarise themselves with the 2022 and 2024 GPG Regulations
- Ensure they have the necessary internal systems in place to capture, analyse and report on their GPG
- Set aside sufficient time to collect the necessary data and carry out the relevant calculations
For assistance on your organisation’s GPG reporting obligations, please contact a member of our Employment & Benefits team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
