THE final rules covering the gender pay gap will affect larger UK employers this year. In April, they will need to carry out an initial data gathering exercise and, within a year, publish the pay-gap information.

This will include a requirement to highlight the median and the mean figure for gender gaps in pay and bonuses, the percentage of men and women receiving a bonus and the numbers of men and women in each quartile of their pay distribution.

These rules will apply only to larger private businesses and third-sector organisations employing 250 people or more. While Holyrood legislation requires Scottish public sector employers to publish their gender pay gap, similar rules covering public-sector workers in England and Wales are also expected in the near future. Qualifying employers are advised to review their payroll systems with a view to conducting a trial run of the new reporting requirements before April. This will involve assessing who qualifies as an employee for this procedure and determining forms of remuneration to be included in any calculation.

These final regulations contain a number of significant changes from the Government’s earlier version, meaning those employers who had put in plans based on the initial version may need to make amends.

This new legislation is designed to create greater transparency in large businesses or organisations about the level of female remuneration compared to male colleagues. By putting this information in the public domain, it is hoped employers will come under pressure to take action if there are gender-related pay discrepancies.

While addressing this issue is a laudable aim that could further Britain’s position as a progressive nation when tackling inequality, just how effective are these new rules likely to be? For those that must comply, there is a glaring lack of clarity about what happens after publication. Although the regulations set out the required processes that employers need to follow in gathering data, there are few clear answers in terms of what action should be taken in addressing any pay gap.

The danger is that employers will focus their time and energy on process at the expense of outcomes. The technical aspects of these regulations also mean that, at least initially, until systems are sophisticated enough to deal with the adjustments, someone in payroll will have the responsibility to individually review the figures.

Analysing and publishing only the statutory reporting requirements of the legislation is also unlikely to provide employers with a sufficiently detailed picture to address specific areas in their organisation where a pay gap may exist.

The biggest challenge around reducing the gender pay gap, which the legislation does not address, is how an employer identifies the cause of any discrepancies. Each industry sector operates in a different manner when it comes to remuneration structures and, similarly, each employer in a sector will have its specific issues that go much further than pay.

For example, a significant aspect of any gender pay gap is occupational segregation where women are either clustered in low-paid positions, such as cleaning and catering, or they hold fewer leadership or managerial positions and are overrepresented at lower levels. The answer lies far beyond pay. While these regulations represent a step forward in transparency they do not help guide an employer to that underlying cause.

Closer engagement with employers is an important part of the equation in fixing the gap but the Government still has more to do, including a greater focus on this issue in the education system. Marking the gender pay imbalance with an annual calendar event – Equal Pay Day in November each year – may be helpful by raising awareness but it unfortunately distorts the picture by assimilating equal pay with the gender pay gap, when the terms are different in law. Also, it simplifies the position by effectively saying that this is about a failure to deliver equal pay.

These new regulations requiring large employers to measure and report gender pay will enhance transparency and may even pressurise some to take decisive action. They mark a few steps forward but there’s still a long journey ahead if we’re to see real change on this issue.

Gillian MacLellan is a partner at law firm CMS.