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Gender pay gap reporting will impact on UK employers' reputation and recruitment, says expert


New gender pay gap reporting requirements will have implications "far beyond the risk of equal pay claims" for the largest UK employers, an expert has said.

The government is expected to publish draft regulations in the next couple of weeks, setting out what public and private sector organisations employing 250 people or more will have to do in order to comply with the new requirements. However, employment law expert Helen Corden of Pinsent Masons, the law firm behind Out-Law.com, said that affected employers should already be reviewing their pay arrangements due to the substantial reputational and employee relations implications of a higher than average gender pay gap.

"The publication of a gender pay and bonus gap will have implications far beyond the risk of equal pay claims," she said.

"Your gender pay gap, and how you report it, will affect your market reputation, employee relations and your ability to recruit and retain staff. Publication of a high gender pay or bonus gap is likely to attract adverse press interest and close employee scrutiny and it is therefore imperative that you are in a position to be able to contextualise any gap and present a positive action plan in relation to how you address it. Taking action now to prepare for the forthcoming new reporting regime is therefore vital," she said.

Organisations could, for example, carry out a legally privileged equal pay review over the next few months in order to establish their gender pay gap, the location of any potential problems within the organisation and potential actions to close any gaps, she said. Employers could also look at how to contextualise any data, and consider whether there were any material factors independent of gender contributing to the gap, she said.

The government consulted on its plans to require organisations with 250 employees or more to publish the difference between the average pay of their male and female employees last year. It has since confirmed that bonus payments will also be covered by the rules. Its consultation response and accompanying draft regulations are expected to confirm what figures should be published and how often, and whether employers should be required or allowed voluntarily to publish contextual information alongside the figure, among other details of the proposals.

Employers will as a minimum be required to publish a "relatively simple" overall average percentage difference in pay across the organisation, although the government has also proposed the publication of separate figures for full-time and part-time employees or the difference in average earnings of men and women by grade or job type as part of its consultation. Depending on the final calculation methods proposed, "safeguards" will be developed to preserve individual and commercial confidentiality, according to the consultation.

Paying people different amounts for equal or similar work has been illegal for over 40 years, but the average female UK employee is paid 19.1% less than the average male UK employee, according to figures published by the government alongside its consultation in July. This pay gap reflects all types of work including part and full time working, and is particularly noticeable among older workers as a result of "the types of jobs that women tend to enter, and the levels of seniority they progress to", the government said at the time.

Corden said that the final regulations were likely to come into force in October 2016, with the first mandatory reports due in 2017.

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