New bill proposes changes to pay reporting obligations

A new Private Members’ Bills, with cross-party support, has been introduced in Parliament, which seeks to give employees the right to know colleagues’ earnings and expands pay reporting obligations.

The Equal Pay Information and Claims Bill 2019 – 2021 (EPIC) has been introduced by Labour MP Stella Creasy to increase pay transparency inside UK organisations.

Here are the main elements of the proposed legislation:

Right to know what colleagues are paid

Under EPIC, each employee would be given a legal right to know how much their colleagues are paid as a means to promote pay equality.

The bill’s proposer Stella Creasy said that a key reason that pay discrimination remains so prevalent is due to the lack of transparency over pay.

The bill, prepared with the assistance of the Fawcett Society, highlighted that six out of 10 working women do not know whether they are being paid less than a male comparator.

Extension of gender pay gap reporting

Gender pay gap reporting already applies to all organisation with more than 250 employees, but EPIC would expand this rule to include organisations with 100 or more employees and include a requirement to publish an action plan for closing the gap.

At the moment, those businesses who report the gap only have to make certain gender pay information available annually, including their mean and median gender pay gaps.

Ethnicity pay gap reporting

The proposed EPIC bill would also require organisations with 100 or more employees to publicly report their ethnicity pay gap. This has been a long-term goal of the Government but so far no action has been taken to introduce this form of pay reporting.

The new bill also contains measures that would reform remedies and time limits relating to equal pay and require the statement of employment particulars to include equal pay.

Historically, Private Members’ Bills have a low rate of success, but the Fawcett Society has said it is confident that it will become law given the cross-party and wider public support.

The next stage for this bill, the Second reading, is scheduled to take place on Friday 15 January 2021. It will then need to complete three further stages in the Commons and then repeat the whole process in the House of Lords before coming into law.