Government rules on gender pay gap reporting come into force for UK businesses

Rebecca Smith
According to the CIPD, fewer than one in three employers carry out analysis of the pay of men and women
According to the CIPD, fewer than one in three employers carry out analysis of the pay of men and women (Source: Getty)

Thousands of employers are set to publish their gender pay gap figures for the first time from today under rules set out by the government.

Voluntary, private and public sector employers with 250 or more employers will be required to publish their figures by April 2018; regulation spanning around 9,000 employers with over 15m employees. That makes up nearly half of the UK workforce.

Read more: Government is failing to tackle the gender pay gap, say cross-party MPs

The UK's current gender pay gap is at 18.1 per cent and the government said these requirements will help employers identify the gaps in their organisation and take action to close them. It said eliminating work-related gender gaps could add £150bn to our annual GDP by 2025.

Minister for women and equalities Justine Greening said:

“We have more women in work, more women-led businesses than ever before and the highest proportion of women on the boards of our biggest companies. This has helped us to narrow the gender pay gap to a record 18.1 per cent – but we want to eliminate it completely."

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.

I am proud that the UK is championing gender equality and now those employers that are leading the way will clearly stand out with these requirements.

Charles Cotton, performance and reward adviser at the CIPD, noted that the rules will cause waves for many businesses.

“With fewer than one in three employers carrying out any analysis of the pay of men and women, we should appreciate that the gender pay gap reporting (GPGR) requirements are set to be a major change for many UK employers," he said.

He added that the changes also present "an opportunity to explore why the gap exists and looking at what practical steps can be taken to reduce it".

"However, some of the causes lie outside the workplace, so government and society also have an important part to play," Cotton said.

What the new regulations will make employers do:

  • Publish their median gender pay gap figures

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 looks at both the low and high earners in an organisation – the government said this was 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 & women in each quartile of the pay structure.

This is meant to show the spread of male and female earners across an organisation, to indicate to 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

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