If an organisation has 250 or more employees in total but fewer than 250 who are based in Great Britain, is it covered by the gender pay gap reporting duty?
Under the draft Regulations setting out the gender pay gap reporting duty, an employer is covered by the duty only if it has 250 or more employees. The draft Regulations define an employee as someone who ordinarily works in Great Britain under a contract of employment governed by UK legislation. However, the draft Regulations have been the subject of consultation and it is expected that they will be amended before being brought into force. The Government has indicated (in its consultation on mandatory gender pay gap reporting for public-sector employers) that the definition of employee that will be used in the final version of the Regulations will be that under s.83 of the Equality Act 2010. While this definition is silent on the position of employees based outside Great Britain, case law has shown that employees who are based abroad can still be covered if their employment has a strong connection to Great Britain.
The Equality Act 2010: Employment statutory code of practice gives guidance on the territorial scope of the Equality Act 2010. It states that when considering whether or not there is a sufficiently close link between an employee's employment and Great Britain, relevant factors include:
- where the employee lives and works;
- where the employer is established;
- what laws govern the employment relationship in other respects; and
- where tax is paid.
If an organisation has fewer than 250 employees based in Great Britain or with a close link to Great Britain, it will not be covered by the gender pay gap reporting duty.