In the last week, there has been a lot of discussion on how females are being paid less than the male counterparts for the same type of work.
It is interesting to see in payroll there are more females than males overall in the payroll industry but it can be seen in a lot of the larger payroll team’s men seem to hold many of the senior positions. NZPPA will be running a major survey in the coming months that will have a section on this area to get some real data on what is happening within our industry.
NZPPA is all for equal pay but is concerned if legislation is created to sort this issue out how that could impact on payroll. This concern is based on the trend from government to dump all the work on the employer (which means payroll).
NZPPA can see this working more in the public sector than the private in New Zealand so it will be interesting how legislation will be constructed and applied to all workplaces or if it can.
To give you an understanding of what another country is currently planning to do in this area we have included some information on what the UK will be doing in this area from April this year.
The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (UK)
New Gender Pay Gap reporting regulations will be coming into force for all private-sector companies who employ 250 or more people from 5 April 2017.
The main points of the legislation are that:
- Employers must be compliant with the regulations for any UK tax year where they have 250 or more employees on 5th April.
- The definition of who counts as an employee for gender pay reporting can be found within the Equality Act 2010.
- This broadly means that employees with a contract of employment and workers with a contract to do work or provide a service are included, as well as self-employed people where they personally have to perform the work.
- Agency workers will form part of the headcount of the agency that provides them, and not the employer they are on assignment to.
- There are six calculations to carry out, and the results of these calculations must be published on the employer’s website and a government website within 12 months. This means that the first publication will be required no later than 4th April 2018.
- The calculations must be signed off in a written statement by an appropriate person, such as a chief executive.
- Employers have the option to provide a narrative with their calculations. This narrative can be used to explain any company specific reasons for the pay gap results and can be used to provide details of any actions that are going to be taken to reduce or eliminate the gender pay gap.
- Each part time worker counts as one employee for gender pay reporting purposes. Where job-share arrangements are used, every employee within a job-share counts as one employee each. For example, if two people job-share, they would still count as two employees for gender pay reporting purposes.
- This is particularly important where employers are accustomed to counting employees as ‘full time equivalents’ because the obligation to report and the calculations that follow are based on the number of individual employees.
- The regulations exclude partners in traditional partnerships and limited liability partnerships, because partners are not “paid” but instead take a share of the profits, which is not directly comparable with employees’ pay.
- An employer that is based in the UK, and who sends employees abroad to work may find that some or all of these employees will need to be counted for the gender pay reporting regulations.
- They should be counted where the employment relationship suggests stronger ties to the UK and UK employment laws than to the law of any other country.
- Indications that someone should be included within the Gender Pay Reporting include:
- having a UK employment contract
- Continuing to have their home in the UK
- Having the UK tax legislation apply to their employment
- Each case should be considered on its own merit and the employer will need to make a decision.
- Employers should be sensitive to how an employee chooses to self-identify in terms of their gender. The regulations do not define the terms ‘male’ and ‘female’ and gender pay reporting should not result in employees being singled out and questioned about their gender.
- Employers should be able to base reports on the gender identification the employee has provided for HR/payroll, if such records are regularly updated.
- Where this information is not available or may be unreliable, employers should establish a method which enables all employees to confirm or update their gender.
- Employees should be excluded from the employer’s gender pay gap calculation if they are being paid either at a reduced rate, or nil as a result of being on leave.
- This includes employees on maternity, paternity, adoption, parental or shared parental leave.
- Employees on maternity leave, or other family leave, should be included only if they are in receipt of full pay during the pay reference period on which the employer’s calculation is based.
- This exclusion does not apply to reporting on the payment of bonuses. Any employees who were on family-related leave for some or all of the 12-month period to which the bonus pay calculations relate should still be included.
What calculations are required?
Each organisation that meets the reporting conditions must publish six defined calculations showing:
- Their average gender pay gap as a mean average
- Their average gender pay gap as a median average
- Their average bonus gender pay gap as a mean average
- Their average bonus gender pay gap as a median average
- The proportion of males receiving a bonus payment and proportion of females receiving a bonus payment
- The proportion of males and females when divided into four groups ordered from lowest to highest pay.
For gender pay gap reporting, the mean figures would be calculated by adding together the sum of all of the hourly pay figures, and then dividing this by the number of relevant employees.
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As this area develops NZPPA in regard to potential impact on payroll NZPPA will keep you involved.
NZPPA supporting payroll since 2007!