Career Advice Legal Case studies for employers

Gender pay gap reporting obligations in the UK and what this means for Hong Kong

Published on Saturday, 06 May 2017

The existing gender pay gap

The gender pay gap has long been a topic of debate. According to Oxfam’s “Report on Women and Poverty”, the gender pay gap in Hong Kong shows no signs of abating, particularly among those living below the poverty line. In fact, the Oxfam report shows that the pay gap has actually increased in Hong Kong over the past 15 years for those below the poverty line, with women on average earning only 60 per cent of the amount men do.

While some employers have implemented “equal pay for equal work” measures, this generally remains an unregulated area in Hong Kong, unless it can be shown that the remuneration policies or practices of an employer are discriminatory in nature.

Part of the problem is the lack of transparency around what male and female employees are paid.

The UK has made some strides in this area recently and these changes may very well affect certain Hong Kong-based employees.

The UK Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 came into force on 6 April 2017. In short, the regulations require employers to publish certain statistics which measure not only the average pay differences (salary and bonus) between men and women in the workplace, but also the proportion of men and women who are paid bonuses.

This data must be published on a company website that is accessible to employees and the public and be uploaded to a government website.

The regulations apply to companies with 250 or more employees on 5 April in any given year (this is known as the “snapshot date”). The reporting obligations relate to “relevant employees”, which is defined as persons “employed by the relevant employer on the snapshot date”.

 

The implications for Hong Kong

More importantly, and the reason why these regulations may be relevant to Hong Kong employees, is that the concept of “relevant employee” extends to employees who are based overseas but whose employment has a sufficient nexus to the UK.

Guidance recently published by the UK government states that if an employer based in the UK has employees based overseas, those employees will be within the scope of the regulations if they would be able to bring a claim to an UK Employment Tribunal.

The guidance then goes on to explain that whether this is the case will depend on whether the employment relationship suggests a stronger connection to the UK and UK employment law than to the laws of any other country.

Factors such as where an employee’s home jurisdiction is, what the contract says about place of work, and governing law, and the proportion of time the employee spends or works abroad are all likely to be relevant considerations when determining whether an employee based overseas is likely to fall within the scope of the regulations.

Employees working on an assignment or secondment basis to Hong Kong from the UK or employees who regularly travel to work in the UK may very well fall under the remit of the regulations.

 

Be prepared

Owing to the cross-jurisdictional application of the regulations, HR personnel in Hong Kong who work in UK companies to which the regulations apply are advised to keep personnel files up to date and to ensure that there are clear records available detailing employees’ remuneration packages, wage periods and hours worked. Having the relevant data will also help with any equal pay risk analysis which may be carried out at a global level within the organisation.

Even if the regulations don’t have any immediate effect on Hong Kong, employees who work for UK companies may find that there is renewed focus on gender pay gap issues in their workplace.

The publication of information which has traditionally been kept close to the employers’ chest will undoubtedly draw attention to firms with the worst statistics.

It is likely that more organisations will rethink remuneration policies and consider ways they can minimise pay gaps in order to avoid bad publicity and brand damage, both of which may hurt them in the recruitment and retention of talent.

 


This article appeared in the Classified Post print edition as Gender pay gap: a UK law's implications for HK.