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Lessons learnt from GPG reporting: Government reacts to BEIS Committee report

Lessons learnt from GPG reporting

The Government responds to the Business Energy and Industrial Strategy (BEIS) Committee’s Gender Pay Gap (GPG) reporting recommendations.

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Director, KPMG Law

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Which recommendations were considered by the Government?

The key BEIS recommendations reviewed by the Government in its response were:

Compulsory narratives

BEIS strongly suggested including a requirement for companies to publish a narrative against their mandatory GPG reporting figures. The Government responded that the requisite for a detailed narrative may result in a ’prescriptive format‘, providing ’little value‘ to the employee. This is an interesting insight to where the ethnicity pay gap consultation may land on this same issue.

Reporting Threshold

The GPG reporting threshold is to remain at 250 employees. The Government dismissed BEIS’s recommendation of lowering the threshold to 50 employees, saying that small companies are susceptible to slight changes within the workforce, which brings into question the value of such data.

Partner remuneration

Under the current GPG regulations, partners’ remuneration is excluded from the GPG calculations. Whilst the Government welcomes the facts that many partnerships are publishing such figures, the guidance will not change within the next year, the Government recognising that it would be ‘unreasonable‘ for companies to go back and collate such data for the reporting year.

Revised GPG reporting guidance

The Government confirmed that it will not modify the existing guidance (published by ACAS and the Government Equalities Office) in relation to the calculation of bonus figures.

Perhaps disappointingly, the response rejected the idea of including bonus calculations on a full time equivalent basis, stating that such a change would ’fail to expose where earnings differ’; undermining the intention of GPG reporting. Recommendations were given to include any bonus anomalies within the company’s narrative report.

What will the Government be focusing on in the future?

Ethnicity reporting at the forefront

If any amendments are made to the GPG regulations, they are likely to be made if and when mandatory ethnicity pay reporting (currently proposed for 2020 but subject to consultation) is introduced. Indeed, the Government recognises the requirement to ’carefully consider how mandatory ethnicity pay reporting will work… including what support should be provided alongside the move to mandatory reporting’.

What should employers take from the Government response?

Whilst the Government’s response does not suggest any imminent changes to the existing GPG reporting regime, employers should be aware of their ongoing responsibility to report on their gender pay gap and the focus that will be on them to close that gap.

Specifically, the Government believes focus should be placed on membership organisations to target industry-specific practice.

If any amendments were to be introduced, they would be introduced prior to the snapshot date for the next reporting year. Therefore, the earliest possible date changes could be brought into effect would be the reporting year 2019/20 (i.e. snapshot date in April 2020), which appears to be optimistic.

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