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Guidance on Gender Pay Gap Reporting & the National Living Wage

payslipIn 2016, employers will begin to see law reforms affecting a number of HR areas; here are just a couple for employers to be mindful of.

It is anticipated that for the first time, large employers will also be required to publish details of their gender pay gap.

For organisations with 250 or more employees; it will be compulsory to publish information about the difference in pay between men and women – this will include details of gaps in bonus payments.

This legislation will apply to private companies, public authorities and voluntary sector organisations. Details of the particulars that need to be included in the report, how the information will be reported and details of fines for non-compliance will be published (final guidelines still to be released); but it is expected that employers will be given enough time to look at how the legislation effects them before it comes into force.

National Living Wage introduced

The introduction of the national living wage from 1st April 2016 sees a major change to minimum pay levels; this may well pose an issue for many employers as they consider how to introduce it.

The national living wage is separate to the living wage, a recommended rate based on the cost of living, used by the Living Wage Foundation, which recommends a higher rate of £8.25 per hour outside London and £9.40 per hour in the capital.

Employers will need to pay staff aged 25 and over £7.20 per hour which will work as a new top rate of the national minimum wage or face a financial penalty of 200% of the amount owed – to a maximum of £20,000 per worker for failure to pay the staff national minimum wage.

Other wage bands to be aware of will be:

  • £6.70 per hour for a worker who is aged 21 years or over (but under 25);
  • £5.30 per hour for a worker who is aged 18 years or over (but under 21 years);
  • £3.87 per hour for a worker who is aged under 18 years; and
  • £3.30 per hour for an apprentice.

For more information surrounding the current rates of National Minimum Wage, a handy NMW Calculator and details of the National Living Wage via the ACAS website, click here.

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