Out-Law News | 18 Jan 2019 | 1:56 pm | 2 min. read
The government was responding (14-page / 176KB PDF) to a report by the House of Commons Business, Energy and Industrial Strategy (BEIS) committee, published following business' first reports. The committee had recommended a number of enhancements and extensions to the rules, along with recommending that businesses be required to publish action plans setting out the actions they would take to close the pay gap within their own organisation.
The response by the government makes it clear that action plans are desirable, but that employers have "the freedom to produce an action plan that is relevant to their individual situation which they can truly commit to and embrace".
"Now that we have completed the first year of gender pay gap reporting, employers can view the diverse range of action plans produced by organisations on the government portal," it said. "We expect that this will provide them with inspiration and, alongside government encouragement, motivate them to produce their own action plan in future years."
The government has also declined to extend mandatory GPG reporting to mid-sized businesses with 50 employees or more as recommended by the committee; or to require businesses to include remuneration of partners in their GPG calculations. It noted that, as businesses have already begun to prepare this year's data on the basis of the existing regulations, it would be unfair to make changes now.
GPG reporting expert Helen Corden of Pinsent Masons, the law firm behind Out-Law.com, said that businesses would welcome this reassurance from the government.
"It is clear from the government's response that there is no desire or immediate plan to change the GPG regulations," she said. "Recommendations had been made by the committee to mandate organisations to publish action plans, which are currently voluntary; to change the regulations to provide that information on salary quartiles is changed to salary 'deciles'; and that alongside an overall pay gap, part-time and full-time gender pay gap statistics should be published. At a time when organisations are preparing for their second year of reporting and the regulations are still in their infancy, this will be welcome news for many employers."
"The government has also indicated that no substantial changes will be made to the guidance accompanying the regulations but that the guidance will be kept under review and may be updated in future reporting years. Employers therefore need to press ahead with finalising their 2018 figures for publication on the basis of the existing regulations and guidance and keep a watchful eye for future developments - the most pressing of which will be ethnicity pay gap reporting. Consultation for this closed on 11 January 2019, and the government is committed to introducing it at the earliest opportunity," she said.
The GPG reporting regulations came into force in April 2017. They require private and voluntary sector organisations with 250 employees or more to publish GPG data for their organisation. Similar requirements apply to public sector employers. The government has reported 100% compliance with the regulations in their first year. Employers must publish updated GPG reports by 4 April 2019, based on figures as at 5 April 2018.
In October, the government began a call for evidence seeking views from employers about the best approach to ethnicity pay gap reporting, with a view to allowing for "decisive action" on workplace diversity without placing undue burdens on businesses. Very few employers currently collect data on their various ethnicity pay gaps, and even fewer have reported this data publicly. The consultation closed last week, and is awaiting a response from the government.