How should employers treat transgender employees when calculating the organisation's gender pay gap?
The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (SI 2017/172) require employers to calculate their gender pay gap by comparing the pay of their male and female employees. Employers should generally use the gender identification that they have on record for their employees. However, employers should be sensitive to the fact that the gender identification that they have on record may not match how the employee self-identifies and that some employees may not identify as either male or female.
Employers could use communications with employees about the gender pay gap reporting exercise to invite all employees to update their records about their gender identification where they wish to do so, but they should not directly question employees on their gender. If an employer does inform employees that they can update their recorded gender, it should emphasise that any such information will be treated confidentially. If it has not already done so, the employer should consider providing training on creating a positive, inclusive workplace for transgender employees. As a minimum, training should be provided to HR and anyone who may be responsible for processing a request from employees to update records about their gender, or who may have access to this information.
The Regulations do not address how employers should make their gender pay gap calculation if they have non-binary employees who do not identify as either male or female, but government guidance advises that employers can omit these employees from their calculation. Employers may decide that it would be reasonable to follow the same approach where they do not know how an employee self-identifies their gender.