Gender pay gap reporting: the GDP could grow by £150bn by 2025 if gap closes

Gender pay gap reporting, regulations

Thousands of employers must publish their gender pay gaps within the next year under a new legal requirement.

Companies with 250 or more employees will be required to publish their gender pay gap figures by April 2018. The regulations will cover approximately 9,000 employers with over 15 million employees, representing nearly half of the UK’s workforce.

The government says that while the UK gender pay gap is a record low of 18.1%, eliminating work-related gender gaps could add £150bn to annual GDP by 2025.

Minister for Women and Equalities Justine Greening says: “Helping women to reach their full potential isn’t only the right thing to do, it makes good economic sense and is good for British business. Those employers that are leading the way will clearly stand out with these requirements.”

As part of the new regulations, employers will be required to:

Publish their median gender pay gap figures

By identifying the wage of the middle earner, the median is the best representation of the ‘typical’ gender difference. Employers will be asked to use data from a ‘snapshot’ period in April to calculate this average.

Publish their mean gender pay gap figures

By taking into account the full earnings distribution, the mean look at both the low and high earners in an organisation – this is particularly useful as women are often over-represented at the low earning extreme and men are over-represented at the high earning extreme.

Publish the proportion of men and women in each quartile of the pay structure.

This data will show the spread of male and female earners across an organisation, helping to show employers where women’s progress might be stalling so they can take action to support their career development.

Publish the gender pay gaps for any bonuses paid out during the year

As there is a significant issue around bonus payments in some sectors, employers will also have to publish the proportion of male and proportion of female employees that received a bonus during the year.

Employers will also be encouraged to publish an action plan alongside their figures, demonstrating the steps they will take to close the gender pay gap within their organisation.

To read more about how best employers can do this, read Gender Pay Gap Reporting: Five things employers need to know by Dominic Holmes, Partner at Taylor Vinters.

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