Gender pay gap reporting: what schools need to know

Many schools will need to be ready for the new rules on reporting pay statistics for men and women from as early as April 2017.

The Office for National Statistics reported in February 2016 that full time working women are paid 9.4% less than full time working men. The gender pay gap for all workers, including those working part time is 19.2%. Reasons cited for the pay gap include discrimination, an imbalance of caring responsibilities and a lack of women in senior roles. It has been suggested that the gap is compounded by secrecy about rates of pay.

In an attempt to bring more transparency to bear on the problem, the Government intends to enact The Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 (the Draft Regulations) which will create a legal obligation to report gender pay gap statistics on medium-sized and large UK employers.

Who has to publish gender pay gap statistics?
Private and voluntary sector employers who have 250 or more relevant employees (meaning those who ordinarily work under a contract of employment in Great Britain) will have to report their gender pay gap statistics. It is estimated that the rules will catch nearly 8,000 employers.

Public authority employers, including maintained schools, academies and free schools, are currently outside the scope of the new rules. However, the Government has announced its intention to introduce gender pay gap reporting obligations for the public sector within the same time period as those for the private sector. A consultation seeking views on these proposals was opened on 18 August 2016.

When will reports have to be made?
The Draft Regulations are expected to be in force by April 2017. The first reports are likely to be due by April 2018, but it is expected that they will report the gender pay gap statistics for the key date of 30 April 2017.

An analysis of gender pay gap figures will then have to be carried out on a "snapshot" date every April and an annual report published within twelve months of that date.

What must be reported?
Schools caught by the rules will have to publish the following statistics (figures for gross pay should be used in all cases):

1. Average women's hourly earnings as a percentage of average men's hourly earnings (based on both the mean and median average)
2. Average bonuses for women as a percentage of average bonuses for men (based on the mean average)
3. The percentage of women who receive bonuses and the percentage of men who receive bonuses
4. The number of male and female employees in each quartile of the employer's pay distribution (based on rates of hourly pay)

What is included in "pay"?
When working out the gross hourly rate of pay for an employee, overtime pay, expenses, benefits in kind and the value of salary sacrifice schemes should not be taken into account. On the other hand, shift premiums, on call and standby allowances will be counted. Under the Draft Regulations, reduced pay, for example where an employee is on sick leave or maternity leave, should be used in the calculations rather than the normal contractual rate of pay. Commentators have pointed out that this will widen the pay gap statistics and there is a possibility that this will change when the rules are finalised.

Where will the statistics be published?
Employers must upload the report to a government website and publish the statistics on their website. There is no requirement for the information to be prominent but it should be accessible to both employees and members of the public. Statistics must be accessible on the website for three years. Employers can, if they wish, include annotations and narrative to give a context for the figures.

What happens if employers do not report or if figures are inaccurate?
There are currently no penalties or enforcement measures for non-compliance in the Draft Regulations. Neither are there any checking mechanisms to ensure accuracy. However, there are likely to be reputational risks where an employer does not comply and the Government is considering naming and shaming employers who do not comply.
Schools should be aware that a Freedom of Information Act request could be made and that the underlying salary information and calculations are likely to be disclosable.

Action points for schools
Although only larger independent schools are currently caught by the legislation, it is advisable for academies, academy trusts and maintained schools with around or over 250 employees to prepare to make the report.

1. All school employers should work out the number of relevant employees they have (including considering which members of staff are "employed under a contract of employment"). 
2. Schools which are under but fairly close to the 250 threshold should consider seeking legal advice on this point.
3. Schools with 250 or more relevant employees may wish to carry out a "dry run" analysis of the figures. This will help to uncover tricky aspects to the calculations. Schools will also have forewarning where the gender pay gap is significant and may need addressing on a strategic level.