Last reviewed 24 February 2021
With gender pay gap reports set to return this year, Ben McCarthy, lead researcher and employment law writer at Croner-i details what organisations need to know for this year’s gender pay gap reporting.
Gender pay gap reporting was originally introduced in order to tackle and discourage large disparity in pay between men and women in organisations. The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 took effect from 6 April 2017, requiring organisations to take a “snapshot” of their gender pay data on 5 April 2017. Organisations had a further 12 months in which to analyse and publish that data, by April 2018 at the latest.
Since then, this has been an annual requirement for organisations with at least 250 members of staff, enabling them to demonstrate if they had seen any reductions in a gender pay gap and, crucially, allow them to show what they’ve done to work towards this. However, all of this changed in 2020, with the challenges posed by the pandemic leading to the Government pausing the lawful need to do this. In short, organisations did not have to publish a report in 2020 — but the Government has now confirmed that they will need to do so in 2021.
So, how will this work? The Government has recently released further guidance outlining more details. Ultimately, the law will work in the same way as it has done previously, but the impact of the coronavirus will be felt. The “snapshot” date that employers in the private sector will need to focus on is 5 April 2020, which, as we will all remember, was just after the first lockdown was implemented and the original furlough scheme had started to be rolled out.
Normal rules on producing a report dictate that employees do not need to be included in the “reporting pool” if they were not on full pay on the “snapshot” date. This means that any member of staff who was furloughed, and who did not have their pay topped up to 100%, can be discounted from the report. The knock-on effect is that the reporting pool could be significantly reduced as a result; the results it produces may therefore show an increase, or decrease, in the gap that is not representative of the real situation.
That said, furloughed staff should still be included in any calculations relating to bonus pay, regardless of whether their salary was topped up or not.
Organisations should ensure that any report they produce is combined with a detailed explanation of the figures; if there is a substantial change, they should explain that this is as a result of the number of staff on furlough and/or the redundancies they have had to make due to coronavirus and steps the organisation had to take in 2020.
Another key issue to bear in mind is the need to have a least 250 members of staff in producing a report. Organisations may have reduced their staffing numbers throughout 2020 and therefore may believe that they are no longer required to produce a report. However, they should note that the key date is 5 April 2020. If on that date they did meet the criteria to produce a report, they will still need to do so. Again, a staffing reduction may have an impact on the figures, so this should also be clearly explained.
Furloughed staff should be taken into account when considering staffing numbers, regardless of whether their salaries were reduced or not.
Enforcement of reporting delay
On 23 February 2021, the Equality and Human Rights Commission confirmed that whilst reporting would still go ahead in 2021, they would delay the enforcement of publications of the report for six months for both public and private employers. This means that enforcement will commence on 5 October 2021 for “all public, private and voluntary sector employers in scope”. While this gives employers an extra six months in which to publish their report, they are still encouraged to do so prior to October.
From 5 October onwards, the EHRC will begin contacting employers who have not yet published their report. A resulting investigation could lead to unlimited fines after court action.