You may have heard in the news about the government making an amendment to the Small Business, Enterprise and Employment Act 2015 which will require employers with 250 or more employees to report on the gender pay gap within their business. It is expected that this reform will come into force in Spring 2016.
These regulations will cover private and voluntary sector employers in England, Scotland and Wales with at least 250 employees.
A consultation, which ran from 14th July 2015 to 6th September 2015, is now closed and the feedback is being analysed. This consultation was seeking views on the government’s manifesto commitment to require larger employers to publish gender pay information, as well as views on wider action that can be taken to inspire girls and young women, modernise workplaces and support older working women.
The gender pay gap
In November 2014 the Office of National Statistics published a report revealing that in the year to April 2014, the gender pay gap for all employees stood at 19.1%, down from 19.8% in 2013. Despite the decrease in the pay gap, the rate of progress is widely-considered to be too slow. In fact, a recent report by statistics agency, Eurostat, has shown that the UK has the 6th largest gender pay gap in the European Union.
Less than one in ten firms ready
The EEF says that while 83% of firms are aware of the proposals on gender pay gap reporting, less than one in ten (7%) are up-to-speed in their understanding of it.
30% are concerned about the amount of work required to provide the data. The survey found that less than one in ten firms (9%) currently report any gender pay information, while many others say they do not have the right systems in place to provide accurate and robust pay data.
The survey highlighted that companies will need to contend with significant gaps in their current pay systems and processes, and are in danger of underestimating the challenges to be overcome in order to provide meaningful and robust data. In fact, only a third (33%) have undertaken a pay audit in the last 5 years – over a quarter of companies (27%) have never undertaken one, while 35% don’t have any measurement systems in place for various pay grades.
Despite this, the survey reported that many firms (47%) viewed the forthcoming reporting requirements as an opportunity to improve their systems and to benchmark themselves.
So what does this mean?
From Spring 2016, employers with 250 or more employees will have to publish gender pay gap information on an annual basis. This means they will have to assess their current pay systems and processes, and decide if they can easily get hold of the required data.
New regulations will specify the precise information that must be included in the reports; it is possible that the reports will need to be broken down to show the hourly rate of employees by gender and also the full-time, part-time and overall gender pay gaps.
Employers may also be asked to publish the difference between starting salaries; average basic pay; and total average earnings broken down by grade and job type and reward components e.g. bonuses.
The penalty for non-compliance is likely to be £5,000, although reputational damage is likely to be of greater concern.
What do you need to do?
Large employers should consider now how they will approach gathering the relevant data. Will this task be dealt with internally? If so, it will be important to identify individuals with a good understanding of equal pay principles and law and who have the skills to collect and analyse the data. This may require employers to offer training and ensure sufficient resources are made available.
Alternatively, you could introduce a new software solution that makes this easy. Zuus Workforce is a cloud-based workforce management software, which is perfect for businesses that have a pool of hourly and salaried staff.
In fact, this solution can be seamlessly integrated with NetSuite, which may be of interest to our current NetSuite customers or those companies looking to take the opportunity to upgrade their business management software.
NetSuite is a single solution used to manage all of your key business processes including your accounts, HR & payroll, CRM, inventory & supply chain, manufacturing, project management, resource allocation, and more. The real-time integration between Zuus and NetSuite syncs staff data, creates links with wage data, and populates hours worked and leave directly into NetSuite. This reduces paperwork and manual processes for payroll by 85%.
How can Zuus help with gender pay gap reporting?
With an export of approved actual hours (including variance reporting) from Zuus, a business could easily filter the list by male / female and check on gender pay gaps. They could also filter by role (line / management / senior management, for example) and check on gender pay gaps there.
Often the pay gap issue is with total pay throughout the year, so a business could use Zuus to pull a report from individual staff to see how much they’ve been paid over the span of a year, and also how many hours each employee is given.
The other way that Zuus could help is with scheduling and ensuring male / female employees aren’t prioritised over each other, so there is a gender balance when scheduling front-line staff in a retail / quick service restaurant store, for example.
Plus, with very high-resolution labour data in NetSuite, businesses can run all kinds of custom reports and saved searches to check on gender pay gaps.
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If you would like to speak to us about Zuus Workforce and how it can help with gender pay gap reporting, or if you would like to discuss integrating Zuus Workforce with NetSuite, please don’t hesitate to get in touch.
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