Revised Draft Equality Act 2010 (Gender Pay Gap Information) Regulations: Key Points

The government has published the much anticipated revised version of the draft Equality Act (Gender Pay Gap Information) Regulations. The key points to note are:

1. The draft Regulations are due to come into force on 6th April 2017.
2. The snapshot date will now be 5 April each year (rather than 30 April). Gender pay gap information will need to be published within 12 months, meaning that the first reports are due by 4 April 2018.
3. The definition of "relevant employees" has been clarified and means "a person who is employed by the employer on the relevant snapshot date". This is to include both workers and employees. There is, however, an exception to the duty to report for employees who are employed under a contract personally to do work where "the employer does not have, and it is not reasonably practicable for the employer to obtain, the data".
4. Only "full-pay relevant employees" need to be included when calculating the relevant gender pay gaps. This is to combat the distortion in figures that relevant employees who are being paid at a reduced rate or nil, as a result of being on leave, would cause. Leave includes annual leave, maternity leave, paternity leave, shared parental leave, sick leave and special leave.
5. The updated Regulations have clarified how "gross hourly pay" should be calculated. This should be calculated by reference to an employee's normal hours, however where no such normal hours are kept, a 12-week reference period should be used.
6. There are two points to note in relation to bonus pay:
   1. bonus pay is still to be included in the calculations, however under the revised regulations only the portion of the bonus payment that is proportionate to the relevant pay period should be included when calculating gross hourly pay; and
   2. bonuses paid in the form of securities, securities options and interests in securities are to be treated as paid at the point that they would give rise to taxable earnings.
7. Quartiles are to contain equal numbers of employees. To create quartiles, employers should rank all relevant employees in order of their hourly pay (low to high) and then divide the employees into four equal groups.
8. Previously, the Regulations and guidance were silent as to what penalty might be applied in the event of non-compliance. However, the Explanatory Notes now state that a failure to comply with the reporting obligations could constitute an "unlawful act" under the Equality Act 2010. This means that the Equality and Human Rights Commission could take enforcement action.

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