Should agency workers and contractors be included in the calculation of an organisation's gender pay gap?

Whether or not agency workers and contractors should be included in the calculation of an organisation's gender pay gap will depend on whether or not they fall within the definition of employee used in the relevant Regulations.

As the draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 do not define "employee", the definition under s.83 of the Equality Act 2010 applies. This definition includes individuals who have a contract personally to do work, which could include some self-employed contractors. An agency worker or contractor who does not have a contract with the employer (either a contract of employment or a contract personally to do work) should not be included in the calculation.

Regulation 2(3) provides an exception for employers in relation to individuals employed under a contract personally to do work. If the employer does not have the data it needs to include the individual in its calculations, and it is not reasonably practicable for it to obtain this data, the employer can exclude the individual from its calculations. This is likely to relate to self-employed workers who, while covered by the Equality Act 2010 definition of "employee", are not included on the employer's payroll.

Agency workers would be included in the calculation of the agency's gender pay gap if they have a contract with the agency, either a contract of employment, or a contract personally to do work.