Wide-reaching changes proposed to gender pay gap reporting requirements

September 7, 2018

Gender pay gap reporting requirements should be extended to organisations with 50 or more employees from April 2020, according to the Business, Energy and Industrial Strategy Committee.

Early this year there was much media coverage as large organisations with 250 or more employees were required to publish information about their gender pay and bonus gaps, along with information on who receives bonuses and salary distribution by gender. Proposals to reduce that level to just 50 employees would mean a significant increase in the number of organisations having to report their data.

The Committee made a number of other recommendations, including counting partners in any calculations to provide a more holistic view of remuneration. The calculations do not currently include partner pay as they take a share of profits instead of a salary. With partners likely to be amongst the most highly-paid people in an organisation, this could alter some reports significantly.

The Committee proposed calculating bonuses on a pro rata basis and requiring more information on full-time and part-time salaries. Both of these could be distorting the data with, for instance, directors receiving large bonuses whilst working fewer hours, or lower-paid employees in part-time roles.

Organisations should also be required to publish an explanation of their pay gap, along with an action plan to close it and updates in future years. The data is publicly available, so media outlets are already providing analysis and commentary of the results, but a new requirement such as this would shift the focus to employers. After a few years of reporting, this could lead to serious reputational risks for organisations not being seen to change.

The next reporting deadline is April 2019, so there won’t be any changes during this period. However, with such wide-reaching proposals, and the Committee also talking about new requirements around disability and ethnicity, employers may have to face up to a more transparent future.

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