On Tuesday this week, the Government launched a consultation regarding the nature of these regulations, which would apply to both private and voluntary sector employers. The consultation will also address "wider action that can be taken to inspire girls and young women, modernise workplaces and support older working women".
The consultation asks a variety of questions, in particular, employers are asked which measures, showing the differences in the pay of male and female employees, they are currently able to calculate using their existing data and systems.
The options put forward in the consultation document for measuring the gender pay gap are an overall gender pay gap figure; one which is broken down by full and part time employees; or one which is broken down by grade or job type. Some commentators have already made the point that the manner in which any gender pay gap is measured will be very significant, in terms of how accurately the figures reflect the reality of the situation. Employers are also asked how often they think reporting should occur; what they estimate the cost of analysing the data and reporting would be; and how long it would take the person responsible to analyse and publish the information.
The consultation also, interestingly, asks whether the 250 employee threshold is appropriate; whether respondents think there are alternative ways to increase transparency on gender pay that would limit the cost for employers, for example reporting to the government via the existing PAYE system; and whether respondents consider there are any risks or unintended consequences that warrant dropping or modifying the implementation of the relevant provisions. Arguably these questions suggest that the Government is not fully committed to the introduction of gender pay gap reporting and have concerns about the additional cost this will impose on businesses. The full consultation document can be read here.
The consultation will close on 6 September 2015. It is expected that following this consultation, a draft set of regulations will be produced and a further consultation may then take place.
The current position, according to a note produced by the House of Commons Library based on statistics from the Office of National Statistics annual survey on earnings, is that while overall the gender pay gap is reducing, it rises significantly for those who are 40 years or older. The full time median pay gap is 9.4% but for those in full time employment between the ages of 40 to 49 it is 13.6%. Moreover, for those very high earning employees, it is 20%. This tends to suggest that the gender pay gap worsens the higher up in an organisation you go and that female senior executives are paid significantly less than their male counterparts. Moreover, while the Government have introduced voluntary gender pay gap reporting, only 4 companies in August 2014 had issued a report out of 275 companies who had signed up to the scheme. Therefore, the current voluntary scheme is having very little impact.
It will be interesting to see the responses to this initial consultation and how matters develop.