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Business Finance: Be prepared for Gender Pay Reporting, says Diane Deller

PUBLISHED: 06:00 03 January 2018

Diane Deller of BDO LLP.

Diane Deller of BDO LLP.

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Any employer with at least 250 employees must report under the Gender Pay Reporting (GPR) regulations by April 4, 2018 (for the private and voluntary sectors) or by March 30 (for the public sector).

The aim of the rules is to focus attention on the gender pay gap and encourage businesses to take action to reduce it.

It is important to understand that GPR is not about equal pay for equal work. It is a global issue about the progression of women − that is, that there are more men in senior roles and more women in junior roles.

Why is there a gap? Of course, there are many reasons. The most common can be described as the “motherhood penalty” and is linked to women taking maternity leave and career breaks, childcare issues and opting for part-time work. There is no quick fix, but it costs government significantly in terms of lost GDP so there is serious economic purpose behind the drive to improve the situation.

There are six different ratios that employers must calculate and report via both their own and the Government-sponsored website. Despite payroll software, identifying the correct pay and bonus figures to start from is not always easy and we recommend planning ahead, particularly in terms of timing and the availability of senior staff who will inevitably need to be involved.

A narrative can also be included and the likelihood is that employers will want to comment on the figures reported, in order to highlight trends and describe their plans aimed at narrowing the gap in the future.

You should note that the headcount test applies per employer. Therefore, in a group company situation, each constituent company is a separate employer for this purpose. Where some group companies are in and others are out, many employers are likely to report voluntarily for those under the threshold.

There is no formal penalty for failing to report, so why bother? The biggest cost of failure will probably be the reputational damage with staff, customers and investors, all of whom increasingly scrutinise the ethical behaviour of a business.

BDO’s practical guide to the GPR process is available on our website and we can help you in all aspects of the GPR process to help resolve any resource gaps. For help and advice, email me at diane.deller@bdo.co.uk.

•Diane Deller is a senior tax manager at BDO LLP.

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