ACAS

The Advisory, Conciliation and Arbitration Service provides free and impartial information and advice to employers and employees on all aspects of workplace relations and employment law.

ACAS have produced two key documents (links below) which clearly lay out the actions that need to be taken by employers in order to comply with the legislation.

Benefit in Kind

Non-cash benefits not usually included in wages and usually found in the form of ‘perks’ or ‘fringe benefits’ for example company cars or private medical insurance. These are also excluded from the calculations.

Bonus

There are two different types of bonus: 1. Bonuses paid as part of an employee's pay within the Relevant pay period and 2. Bonuses paid within the Relevant bonus period.

These are two very different bonuses. For example: Snapshot Date = 5 April 2018 - Jane is paid £17,000 in her April payroll - £5,000 Ordinary pay and a £12,000 bonus for her performance during the last 12 months. This is used to determine Gender pay gap and NOT Gender bonus gap. If the £12,000 had been paid in March then it would contribute to Gender bonus gap calculations - see ACAS pages 25-26.

Employee

The Equality Act 2010 defines this as: Employees (those working under a contract of employment), workers & agency workers (those with a contract to do work or provide services) & some self-employed people (where they have to personally perform the work).

Equal pay

This concerns the pay differences between men and women who carry out the same jobs, similar jobs or work of equal value. It is unlawful, under the Equality Act 2010, to pay people unequally because they are a man or a woman

The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017

This is the legal document which details the steps to be followed by most Private and voluntary sector organisations plus those Public sector ones not covered by the specific public sector regulation. This is the source document for any questions you may have regarding the methodology, but practically we suggest you refer to the the ACAS documentation. Link provided below.

Extra pay

Extra pay is any element of pay which is not considered Ordinary pay: pay related to overtime, redundancy or termination of employment, pay in lieu of annual leave or pay which is not money (benefit in kind and securities).

Full pay relevant employee

Any employee who is employed on the snapshot date and who is paid their usual full basic pay (or pay for piecework) during the relevant pay period. If they are paid less for reasons other than Leave (i.e. being on strike) then they still count.

If the employee receives no pay during the Relevant pay period then they are to be excluded from Gender pay gap calculations, but still valid for Gender bonus gap calculations - all of these employees are Relevant employees, so they feature in both Gender pay gap and Gender bonus gap calculations.

Gender bonus gap

This is exactly the same methodology as genderpay gap, but it uses pay data from bonuses paid during the last Relevant bonus period.

Gender pay gap

The difference between the average (Mean or Median) earnings of Men & Women. To find the difference between the genders you must first work out the average pay for each and then apply the following formula: (Male pay - Female pay) / Male pay.

Interest-free loan

Any loan from an employer to an employee such as season ticket loan are not included.

Leave

This includes: Annual leave, maternity, paternity, adoption, parental or shared parental leave, sick leave, special leave and any other form of leave (e.g. study leave or sabbaticals).

Ordinary pay

Ordinary pay includes basic pay, allowances, pay for piecework, pay for leave and shift premium pay. It only includes money payments, so anything that is not money (such as benefits in kind or securities) is excluded. Gross amounts should be used after salary sacrifice - it does not include any elements of Extra pay.

Partner

This is an employee who would expect to receive performance/profit-related remuneration rather than basic pay. Think of partners of a law firm, accounting firm or a professional services organisation.

Relevant bonus period

The period of 12 months ending with the current Snapshot Date: Private & third sector = 6 April - 5 April in same year as Snapshot Date | Public sector = 1 April - 31 March in same year as Snapshot Date.

Relevant employee

Relevant employees are all employees employed by the Relevant employer on the Snapshot Date of any given year, except for partners of.a firm (i.e. LLP) - these are not necessarily Full-pay relevant employees, so only feature in Gender bonus gap calculations unless other criteria are met.

Relevant employer

Any employer who has 250 or more employees on any Snapshot Date. Employers who have close to 250 employees should apply this rule every Snapshot Date to ascertain if they are required to report.

Relevant pay period

Any period (usually a week, fortnight or month) during which the Relevant Employer pays the Relevant employee Ordinary pay and in which the Snapshot Date falls.

In practice, if an employee recieves Ordinary pay for the month of April and the employer is private sector then the Snapshot Date of 5th April is covered by this period and the conditions are met; for Public sector it's 31st of March, so this would most likely be the March payments and not April.

Salary sacrifice

Usually an agreement between an employer and employee to change the terms and conditions of employment to reduce the employee’s entitlement to cash remuneration – usually in return for some form of non-cash ‘fringe benefit’, perk or benefit in kind that is not reflected in their salary or wages. Ordinary pay is calculated after any Salary sacrifice is taken off.

Snapshot Date

This key date is the basis for many calculations: an employee has to be employed on this date, the relevant pay period must cover this day and it’s the date from which a relevant employer has one year to publish the gender pay gap report.

STEM

Stands for Science, Technology, Engineering & Maths - STEM subjects or occupations are areas whose core focus is in one of these four areas.