The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (SI 2017/172), which set out the detail of the gender pay gap reporting duty for private- and public-sector employers, will come into force on 6 April 2017. The Government published a final draft of the Regulations on 6 December 2016.
Employers with over 250 employees will be required to publish information on their gender pay gap and gender bonus gap on an annual basis.
The pay information must be based on data from a snapshot date of 5 April every year, beginning on 5 April 2017. The bonus information must be based on the preceding 12-month period, beginning with the 12 months leading up to 5 April 2017. Employers will have 12 months in which to publish the information, meaning that first publication will be required no later than 4 April 2018.
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Further non-financial reporting requirements have been brought into effect for large Public-Interest Entities (PIEs), i.e. those companies which have over 500 employees and with securities admitted to a regulated market in the EU, together with credit institutions and insurance undertakings.
The Department for Business, Energy & Industrial Strategy (BEIS) has published Regulations which implement the EU Non-Financial Reporting Directive 2014/95/EU on disclosure of non-financial and diversity information by certain large undertakings and groups in the strategic report. The aim of the EU non-financial reporting Directive (EU NFR Directive) is to improve the transparency of certain EU companies as regards non-financial and diversity information.
The Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016 (SI 2016/1245) (the Regulations) which transpose the minimum requirements of the EU NFR Directive will apply to the financial years of companies and qualifying partnerships, within scope of the Regulations, beginning on or after 1 January 2017. Therefore if your financial year began on January 1st 2017 you are already into your first year for collating the necessary data for the new reporting requirements.
The EU NFR Directive was approved by the council of the European Union in September 2014. It requires large public-interest companies with more than 500 employees to provide a non-financial statement that discloses relevant and material environmental and social information, employee matters, respect for human rights, and anti-corruption and bribery matters in their annual report. It also introduces disclosures relating to business model, principal non-financial risks and non-financial key performance indicators.
The EU NFR Directive also requires those within scope to provide further information in the corporate governance statement on their diversity policy, covering age, gender, geographical diversity, and educational and professional background. Disclosures shall set out the objectives of the policy, how it has been implemented, and results. If a company does not have a diversity policy it must explain why this is the case. In November 2016, the Financial Conduct Authority (FCA) made amendments to the Disclosure and Transparency Rules (DTR) to implement this part of the EU NFR Directive as the requirements for a corporate governance statement are implemented in the UK through the DTR of the FCA.
The new rules complement the narrative reporting regulations in the UK. Through complying with the narrative reporting regulations UK quoted companies will already be disclosing specific information on the company’s strategy, business model, human rights and gender diversity in their strategic report and disclosing information on greenhouse gas emissions in their directors’ report. The new NFR Directive will extend the level of disclosures required on diversity (for example policies on age, gender, educational and professional background and professional background) and will specifically require reporting on bribery and corruption matters for the first time.
For help with either narrative or new non-financial reporting requirements, please Contact Us
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