When calculating their gender pay gap, how should employers treat staff on zero hours contracts?
Employers should include staff on zero hours contracts in the calculation of their gender pay gap if they meet the relevant definition of an employee. The draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 do not define "employee", but the explanatory note to the Regulations confirms that the relevant definition is that under s.83 of the Equality Act 2010, which includes workers who have a contract personally to do work, as well as those with a contract of employment. This would include zero hours workers.
The Regulations set out the method for calculating the hourly rate of pay for employees with irregular hours, such as those on zero hours contracts. The employer should calculate the employee's average working hours over the 12 weeks before the end of the relevant pay reference period. Any weeks in which the employee did not work should be discounted; the average should be taken from the last 12 weeks in which the employee did work.
If the employee has not been at work for long enough to calculate average hours over 12 weeks, or where the employer is not reasonably able to make the calculation for some other reason, a number can be used that fairly represents the number of working hours in a week, taking into account where appropriate:
- the average weekly working hours the employee could expect under his or her contractual terms; and
- the average working hours of employees in comparable work with the same employer.