Reporting the Gender Pay and Gender Bonus Gap Data

The draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 require employers, with more than 250 employees, to publish their first gender pay gap report by 30 April 2018, giving you up to 12 months from the pay period covered by the report to do this. The report must appear on your website, in English, in a manner that is accessible to all your employees and to the public. Once published it must remain there for at least three years.

Employers will have to publish the results, but not the raw data on which the calculations are based, for each of the benchmarks set out below:

  • The mean gender pay gap
  • The median gender pay gap
  • The mean bonus pay gap
  • The proportion of men and women receiving a bonus payment and
  • The number of men and women in each of the four pay bands.

Your report will have to include a written statement confirming that the information is accurate. This must be signed by a director, partner or member of your organisation’s governing body.

As an employer you will also be expected to upload the information to a government website, where the intention is to create a publicly available league table or database.

There will be no legal obligation on you to publish any form of commentary on the figures or to set out any actions that it may be taking to address the gender pay gap. However, ministers have made clear that the Government will strongly encourage you to do so.

You should be particularly aware of the potential damage to your reputation, especially among potential future employees, of failing to set the data in context or to provide an explanation. Where you can report a gender pay gap that is narrower than that generally seen in the wider economy, and/or within its industry, this could enhance your organisation in the eyes of both job applicants and existing employees. However, you cannot assume that a job applicant will automatically be aware that your gender pay gap is better than average. This needs to be spelled out.

If your company’s gender pay gap is wider that the average, additional explanation will help to protect your reputation. Is the gap wide because of the industry in which you operate or the types of roles that exist within it?  For example, women make up only 14.4% of all employees in science and technology occupations and represented just 15% of undergraduate entrants to engineering and technology courses in 2014/15. Employers with a large number of well-paid roles in these areas may struggle to recruit women to them.

Additionally, you may wish to use the opportunity to set out what you are doing to ensure that you recruit, develop, reward and promote women as well as men. This is particularly important if there are few mitigation factors to explain a wide pay gap within your organisation.

Need help with writing your first gender pay gap report? Get in touch to find out how we can help by contacting us on 0118 940 3032 or emailing sueferguson@optionshr.co.uk.

Changes to the National Minimum Wages

The National Minimum Wage Act 1998 lays down minimum levels of hourly pay for certain employees. The current rate for those aged 21 and over is £6.70 per hour. From 1 April 2016, the National Minimum Wage (Amendment) Regulations 2016 introduce the national living wage, set at £7.20 per hour, for workers aged 25 and over.

The National Minimum Wage Regulations 2015 make sure that the hourly rate, at which a worker is entitled to be paid in respect of his or her work in any pay reference period, is the rate that is in force on the first day of that period. The pay reference period is a month or, in the case of a worker who is paid wages by reference to a period shorter than a month, that period. Therefore, where a pay reference period begins before 1 April 2016, the old rate of the national minimum wage will apply for that pay reference period.

From 1 April 2016, the National Minimum Wage (Amendment) Regulations 2016 introduce a compulsory national living wage of £7.20 per hour for all workers aged 25 and over. The Regulations also double the financial penalties for which employers will be liable if they are found to have paid any workers below the national minimum wage. The penalty is increased from 100% to 200% of the total underpayment for all workers specified in the HMRC notice of underpayment.

If you need to know more about these changes, how they affect your business and your employees, or how to handle the changes, come to our next Employment Law Update workshop. It is being held on 12 April 2016 in Wargrave, Berkshire and costs just £20 +VAT. Click here for details and online booking.

The Year Ahead – Expected Changes to Employment Law

In 2016, employers will see a number of key Employment Law changes. Here is a summary of those agreed so far, to help you prepare for how they might affect your business.

January 2016

Redress for workers punished for breaching exclusivity clause – Regulations came into force on 11 January 2016 to enable workers who suffer a detriment, or are dismissed as a result of breaching an exclusivity clause in a zero hours contract, to make a complaint to an employment tribunal.

March 2016

Gender pay reporting details revealed – Regulations must be introduced by 26 March 2016 that will require employers with 250 or more employees to publish information about their gender pay gaps.

April 2016

National living wage introduced – A new compulsory national living wage, which works as the top rate of the national minimum wage, will be introduced on 1 April 2016 for workers aged 25 and over.

Duty to prepare modern slavery statement takes effect – The duty to prepare a slavery and human trafficking statement (which has been in force since 29 October 2015) will apply in relation to financial years ending on or after 31 March 2016, for companies with a turnover of at least £36 million per year. This will begin to take effect for employers from 1 April 2016, depending on the timing of their financial year.

Penalty for failure to pay national minimum wage doubled – Draft Regulations double the penalty for non-payment of the national minimum wage and the national living wage for pay reference periods starting on or after 1 April 2016.

Statutory pay changes – The maximum amount of a week’s pay for the purposes of calculating statutory redundancy pay, and other awards such as the basic award for unfair dismissal, is likely to increase on 6 April 2016. The weekly rates of statutory sick pay, maternity pay, paternity pay, adoption pay and shared parental pay will not increase for 2016/17.

October 2016

National minimum wage – This may rise on 1 October 2016, subject to the prevailing economic conditions and the Low Pay Commission’s report, which is due to be delivered to the Government in February 2016.

There are many other changes that are yet to be confirmed, including the Trade Union Bill coming into force, a cap on public-sector exit payments being introduced and new rules on apprenticeships. We’ll bring you news of all these and other changes as they are confirmed. If you have any questions about these changes and how they affect your employees and your business, do get in touch by calling 0118 940 3032 or by clicking here to email us. We will be running our next Employment Law Update workshop on 12 April 2016. Click here for details and online booking.

What’s the Best Way to Keep Your Staff Happy?

Happy employees make happy clients and customers. Here’s a check list of all the things you should be doing, to keep your staff – and therefore your clients and customers – happy. How many are you doing?

  • Improve their engagement with your company – low cost options include offering flexibility, the opportunity to buy or sell holiday and working from home
  • Cheer everyone up – buy them food at work
  • Give lots of praise – in public, if necessary
  • Recognise their achievements – a lot
  • Be reassuring (but realistic) about job security
  • Be flexible about working hours and opportunities to improve their work life balance
  • Be open, honest and involved with your team
  • Keep them in touch with all the news – good or bad
  • Keep up with employees training and development – it does not need to cost a lot. Don’t abandon development and new opportunities. Job training is perceived as a value
  • Develop your company culture – involve everyone in decisions and provide opportunities for staff who don’t normally work together to get to know each other
  • Offer chances to put forward suggestions – it could save you a fortune and it increases the sense of ownership and belonging
  • Provide regular team meetings to reinforce the company culture and beliefs
  • Think about using a promotion as a low cost way of improving self-esteem and self-worth
  • Treat everyone with respect – it doesn’t cost anything and it improves motivation.

How well did you score? What more could you be doing to keep your staff happy?

What’s the Difference Between Informal and Formal Appraisals?

This is a question I’m often asked by managers, so I thought I would answer it here.

A performance appraisal can occur in two ways – informally or more formally (or systematically.) Informal appraisals can be carried out whenever the supervisor feels it is necessary. The day-to-day working relationship between a manager and an employee offers an opportunity for the employee’s performance to be assessed. This assessment is communicated through conversation on the job, over coffee, or by on-the-spot examination of a particular piece of work. Informal appraisals are especially appropriate when time is an issue. The longer feedback is delayed, the less likely it is to encourage a change in behaviour. Frequent informal feedback to employees can also prevent surprises when the formal evaluation is communicated. However, you should make sure that they don’t become too informal – don’t be tempted to discuss an appraisal in the pub!

Although informal appraisals are useful, they should not take the place of formal appraisals. These are used when the contact between a manager and an employee is more formal. This could be when they don’t see each other on a daily, or even weekly basis. It requires a system to be in place to report managerial impressions and observations on employee performance.

When Should You Carry out Appraisals?

Appraisals typically are conducted once or twice a year, most often annually, near the anniversary of the employee’s start date. For new employees, common timing is to conduct an appraisal 90 days after employment, again at six months and annually after that. ‘Probationary’ or new employees, or those who are new and in a trial period, should be evaluated frequently—perhaps weekly for the first month and monthly thereafter until the end of the introductory period for new employees. After that, annual reviews may be sufficient.

Some managers prefer to meet with their employees more frequently. Some companies in high-technology fields are promising accelerated appraisals— six months instead of a year—so that employees receive more frequent raises. The result for some companies has been a reduction in turnover among these very turnover-prone employees.

A regular time interval is a feature of formal, systematic appraisals that distinguishes them from informal appraisals. Both employees and managers are aware that performance will be reviewed on a regular basis and they can plan for performance discussions. In addition, informal appraisals should be conducted whenever a manager feels they are desirable.

Should We Talk About Pay As Well?

Many experts say that the timing of performance appraisals and pay discussions should be different. The major reason for this view is that employees often focus more on the pay amount than on what they have done well or need to improve. Sometimes managers may manipulate performance appraisal ratings to justify the desired pay treatment for a given individual.

However you carry out appraisals – whether informally or formally – take some time to think about the pros and cons of the different options. This will help you implement the best process for the development of your business and your employees.