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From 2018, organisations with more than 250 employees will have to disclose how much they are paying their male and female staff both in salaries and bonuses. The aim of the new pay rules is not necessarily to name and shame but to encourage organisations to consider whether they are rewarding and recognising their talent and to address the pay gap that according to the Office of National Statistics (ONS) still suggests women are paid on average 80p for every £1 earned by a man.
But do these statistics truly reflect pay information in the UK workforce? An earlier study by the ONS suggested that women in their twenties and thirties who work full time now earn more than men on an hourly basis so are these league tables going to take into account the fact that age would still appear to be an important factor when considering pay gap information? The information is expected to include both mean and median calculations, bonuses and salary information across different levels of income and seniority.
These obligations were originally due to be implemented in 2016. Some concern has been raised about the delay and that a further delay of two years will mean that organisations have a significant period of time to rectify any disparity so they don’t appear on the league tables that will be published after 2018.
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Organisations with more than 250 employees will need to start calculating their pay information 12 months before the first league tables are published in April 2018. The Government has announced a package of help for the estimated 8,000 employers in the UK that will have to publish their average pay and bonus information for male and female employees. It is expected that by requiring organisations to disclosure bonus information in addition to salary information, this will highlight pay disparity especially in City firms where it is believed that is a significant difference in payments.
It will certainly make for interesting reading once the pay information has been reported and processed, but whether this will be a true reflection of the workforce remains to be seen. Carolyn Fairbairn, CBI Director-General believes it will only present a partial picture that does not take into account the mix of part time and full time working and sector specific differences. However, as the first league tables are not due to be published until 2018, we will be waiting a while yet to find out.
Pam Loch, Managing Director and Associate Director Julie Edmonds of niche employment law practice, Loch Employment Law.
This information is intended as a guide only. Whilst the information contained in this document is believed to be correct, it is not a substitute for appropriate legal advice. Loch Employment Law can take no responsibility for actions taken based on the information contained in this document.