Please Mind the Gap: Gender Pay Reporting - What NI Businesses Need to Know

If you have heard something about gender pay gap reporting but are unsure how and when it will apply then read on!

In GB, there is an imminent requirement following a revision of the Equality Act (2010) to carry out gender pay gap reporting from 6^th April 2017.  Northern Ireland has yet to pass similar legislation but this is still on the horizon. The particular piece of legislation for Northern Ireland on gender pay gap reporting is contained within the Employment Act (Northern Ireland) 2016 and while this legislation has been delayed due to the recent developments within the Northern Ireland Assembly, it is likely to be introduced this year.  This article will tell you what you need to know to be prepared and the key differences between the GB and Northern Irish legislation on this subject.

Many employers across the UK are reportedly concerned that the provisions for equal pay reporting are yet another administrative burden on business making little difference to the status quo.  A Guardian article in January this year highlighted that between the Baby Boomer generation and Millennials, the current gender pay gap has narrowed from 16% to 5%.  Great news, right?  So, if the pay gap is moving in the right direction it beggars the question: ‘why now is the government introducing this legislation and what benefits will this bring to businesses and employees?’

What are the requirements in Northern Ireland?

The new GB legislation will require employers in England, Scotland and Wales, who as of 5^th April have a headcount of 250 staff, to report six calculations.  These will show the proportion of male and female staff, mean and median pay, mean and median bonus rates and the proportion of staff receiving bonuses by gender. 

While the Northern Irish legislation is still in draft form, the provisional legislation similarly stipulates that, employers (the criteria for those required to follow the legislation is yet to be detailed) must publish information on whether, using standardised calculations, differences exist between the pay of male and female employees.  Should such a disparity exist, the draft regulations state that the employer must also publish a plan to eliminate those differences and that this information must be sent to all employees, including any recognised trade unions.  This information must be published at regular 12-month intervals.

While still in draft, it is likely that the legislation for Northern Ireland will include the same or similar standardised calculations and likely to include similar limitations on which companies are required to follow the gender pay gap reporting requirements. 

It’s important to note that in NI the legislation is planned to go further than gender pay gap reporting. In contrast to the current GB legislation, there is also an additional requirement for companies in Northern Ireland to publish information to include workers within each pay band based on ethnicity and disability.  This is a key difference between the Northern Irish provision and that in GB. 

What are the potential benefits of introducing this legislation?

The real purpose of this legislation is ultimately to get businesses to look more closely at their staff remuneration by gender, ethnicity and disability and to implement strategies to close any gaps.  By requiring this information to be made public, it is allowing existing and prospective new employees to evaluate their current or future employer.  The implications and potential advantages of these publications are clearly significant. 

Justine Greening, Minister for Women and Equalities is quoted as saying, “Britain has the lowest gender pay gap on record, there are more women in work than ever before, more women-led businesses than ever before and there are now women on every board in the FTSE 100. But if we are to help women to reach their potential and eliminate the gender pay gap, we need to shine a light on our workplaces to see where there is more to do to. This tool will empower both men and women to challenge this issue in their profession and help people to make more informed decisions about their career.”

Regardless of industry, attracting top talent and retaining talented and skilled employees is becoming a challenge for employers – and in the digital era, with information readily available on employers, existing employees and future employees are perceptive and astute when it comes to considering their future career options. 

This may explain why there has been such an emphasis placed on equal pay over the past number of years and, while the gap has narrowed, Government data suggests that some industries may have more work to do than others in addressing historical disparities. 

Surprisingly, a BBC News article in August 2016 suggested that Northern Ireland appears to buck the trend when it comes to equal pay, suggesting that unlike in GB, women are paid more than their male counterparts, something that has continued since 2012. 

Benefits for NI Employers

For Northern Irish firms the potential benefits from undertaking this work (which for larger employers with integrated HR information systems could be less resource consuming) may include:

• Identifying any existing pay gaps to avoid equal pay issues from arising
• Identifying and addressing any disparity that exists for ethnic minority and disabled colleagues
• Using the information to plan how any disparities can be gradually corrected over time
• Publically advertising that the company carry out such reporting to ensure equality and therefore attract high quality candidates as an employer of choice
• Attracting new or graduate employees in historically gender polarised professions such as engineering, IT and manufacturing

What do Northern Irish Companies need to do now?

For Northern Irish companies this is a very fluid situation, which is likely to change quickly depending on what happens within the NI Assembly, so employers should monitor this area closely. 

The provisional legislation stipulates the first regulations under the Gender Pay Gap section of the Employment Act (NI) 2016 be made by 30 June 2017.  It would be reasonable, therefore, to assume that firm criteria will be stipulated by this date prior to the legislation being enacted.  

As the provisions in the Employment Act (Northern Ireland) 2016 are likely to resemble the same criteria and methodology as the Equality Act 2010, I would suggest Northern Irish companies having 250 or more staff review what action they need to take to conduct a review of staff pay. 

Key things to consider would include:

• How you are going to extract and process the data.  This data will need to include staff gender, ethnicity and disability, hours worked, salary and bonus information
• How this information will be verified?
• Who will be responsible for drafting the written statement?
• What narrative will be included in the statement to reflect the data?
• How this will be published? For example, on the company website etc.
• Who will be responsible for addressing any identified pay gaps?

For all Northern Irish based companies, I would strongly suggest getting a head start.  While the legislation is not in place given recent developments on ‘The Hill’, it would be prudent to ask the above questions and ensure you are ready to implement the reporting when the legalisation comes into force.  Having a practice run with the data you already have will also give you time to address any gaps or inconsistencies before a publishing deadline looms.