Impact of Covid-19 on Gender Pay Gap Reporting
Following commentary over the past year about the impact of Covid-19 on gender pay gap reporting, the Equality and Human Rights Commission (EHRC) has announced that employers now have until 5 October 2021 to report their gender pay gap information for the 2020/2021 reporting year.
What is the gender pay gap?
The gender pay gap is the difference between the average (mean or median) earnings of men and women across a workforce, and is usually shown as a figure representing women's pay as a percentage of that received by men. The Office for National Statistics has reported that, in 2020, the gender pay gap fell to 7.4% among full-time employees only, and 15.5% among all employees, whatever their working pattern.
From 2017, employers who have a headcount of 250 or more on the applicable ‘snapshot date’ must comply with regulations on gender pay gap reporting.
The key deadlines are as follows:
- (Most) public authority employers must use a snapshot date of 31 March and report and publish their gender pay gap information by 30 March of the following year; and
- Private, voluntary, and all other public authority employers must use a snapshot date of 5 April. As well as reporting and publishing their gender pay gap information by 4 April of the following year, these employers must also include a written statement.
What is the impact of Covid-19 on gender pay gap reporting?
The gender pay gap reporting obligations are set out in the following pieces of legislation:
- Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, SI 2017/172, applicable to the private and voluntary sector and public sector employers not within the public sector regulations (Private Sector Regulations); and
- Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017, SI 2017/353, applicable to most public sector employers (the Public Sector Regulations).
In short, the regulations are in place to increase pay transparency and encourage employers to take more action to address pay inequality. Whilst the regulations do not provide specific sanctions for non-compliance, which has resulted in many saying they have no 'bite', the principal risk of non-compliance is arguably adverse publicity.
For more information on the information that employers are required to publish, please click here.
What is the Covid-19 impact on gender pay gap reporting?
Gender pay gap reporting in 2021
The EHRC has announced that, unlike in 2020, when enforcement of gender pay gap reporting was suspended, those employers with 250+ employees will have to report on their gender pay gap data for 2020/2021. As above, private employers must report and publish their gender pay gap data with a written statement by 4 April 2021, based on a snapshot date of 5 April 2020. However, the EHRC has confirmed that it will give employers a six month grace period and, therefore, will not begin enforcement until 5 October 2021. This six-month delay in enforcement will give some employers, whose businesses may have been closed for much of the year, more time carry out necessary work. Indeed, Baroness Kishwer Falkner, chair of the EHRC, said:
"We know businesses are still facing challenging times. Starting our legal process in October strikes the right balance between supporting businesses and enforcing these important regulations".
The EHRC is nonetheless still “encouraging” affected employers to submit their data before this date.
The impact of furlough on gender pay gap reporting
The EHRC has published guidance which helpfully confirms that employees on furlough leave during the relevant pay period should also be excluded, unless their pay was topped up to their usual full pay. The inclusion of furloughed employees within the scope of gender pay gap reporting would have undoubtedly affected the figures, so this is a sensible rationale.
What should employers be doing to comply?
Despite the six-month respite afforded to employers this year, it is definitely encouraged to report on time if possible and avoid putting it on the 'back-burner'. Whilst most large employers will now have a number of years of experience in carrying out their gender pay gap reporting obligation, others may have only reached the 250 employee threshold this year. If you are an employer, and the latter situation is the case, it is worth considering:
- Who will take ownership of the gender pay gap reporting task; and
- Whether your systems appropriately record the data needed to carry out the necessary calculations.
This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact Emily Edwards to discuss any issues you are facing