When calculating their gender pay gap, how should employers report the pay of employees who are on maternity leave, or other family leave?

The draft Regulations setting out the gender pay gap reporting duty say that the "pay" on which employers must base their calculations includes maternity pay. However, the draft Regulations have been the subject of consultation and it is likely 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 employers will be required to include employees on maternity leave in the calculation of their gender pay gap only if the employee is in receipt of full pay. Therefore employees in receipt of statutory maternity pay, reduced contractual maternity pay, or no pay would be excluded from the calculation. The Government has also indicated that the amended Regulations will treat employees on paternity, adoption and shared parental leave in the same way as those on maternity leave.

The draft Regulations are unclear on how employers should calculate the hourly pay of an employee who has not worked any hours during the relevant period. A potential approach would be to base the calculation on the contractual hours that the employee would have worked had he or she not been on maternity leave or other family leave.