COVID-19 Coronavirus Business Impact: Enforcement of UK Gender Pay Gap Reporting Suspended

Dechert LLP

Dechert LLP

In another step designed to relieve burdens on business during the COVID-19 coronavirus pandemic, it was announced last week that enforcement of the obligation on UK employers of the requisite size to file gender pay gap reports is being suspended for the reporting year 2019/2020. Employers will therefore not face the risk of enforcement obligation if they fail to file their gender pay gap reports by the deadline for private companies of 4 April 2020 in respect of the 2019-2020 reporting year and its “snapshot date” of 5 April 2019.

The Minister for Women and Equalities Liz Truss and the Chair of the Equality and Human Rights Commission jointly made the following statement: “We recognise that employers across the country are facing unprecedented uncertainty and pressure at this time. Because of this we feel it is only right to suspend enforcement of gender pay gap reporting this year.”

This means in practice that employers will not be expected to issue the reports usually required. In normal circumstances an employer which failed to report on its gender pay gap data would risk investigation by the Equality and Human Rights Commission as well as potential enforcement proceedings leading potentially to a fine as well as reputational damage.

According to the Government, some 26 percent of employers who are expected to file gender pay gap reports this year have already done so. The question employers will need to consider in due course is whether to abandon gender pay gap reporting for this year entirely or to defer making a report until circumstances render it easier to complete the work that may well already be well advanced in compiling the relevant figures and producing reports given the proximity of the deadline for reporting.

The Chartered Institute for Personnel and Development has urged companies to continue to honour their reporting commitments. Its view is that “The Coronavirus stands to have a disproportionate impact on women in the labour market, because of the high proportion of women working in retail and hospitality. This makes it more important than ever that we don’t take our eye off the ball and risk losing momentum in our efforts to close the gender pay gap.”

The timing of the COVID-19 coronavirus pandemic will potentially have a longer term impact on employers’ gender pay gap figures which may complicate their assessment of the progress which they are making towards tackling the gender pay gap and the effectiveness of their action plans. The reporting obligation is based on a snapshot of April each year. If, in the period leading up to April 2020, an employer has been reducing pay for employees as part of restructuring and cost cutting measures adopted in response to COVID-19 coronavirus, this will have an impact on the matters required to be reported on and may affect how representative the April 2020 snapshot is for the purposes of comparison with prior and subsequent reporting years.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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