Gender pay gap reporting update

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Enforcement of the obligation on UK employers of the requisite size to file gender pay gap reports was suspended in respect of 2019/20 due to the Covid-19 outbreak. The obligation to comply with the applicable gender pay gap reporting obligation still applies in respect of 2020/21, and any private sector employers will need to report on their gender pay gap by 4 April 2021. For public authority employers, the deadline is 30 March 2021. 

Although the requirements themselves have not changed, the Government published new guidance on 14 December 2020 which covers a range of issues that employers may face when compiling and publishing gender pay gap reports (the “Guidance”). 

Despite the gender pay gap reporting requirements having been in place for some time, the Guidance is particularly helpful in clarifying employers’ obligations not least in the light of the widespread use of furlough arrangements following the introduction of the Coronavirus Job Retention Scheme (“CJRS”) in March 2020, which preceded the “snapshot date” for most qualifying employers in respect of 2020/21 reporting of 5 April 2020.

Guidance

The gender pay gap is the difference between the average (mean or median) earnings of men and women across a workforce. From 2017, employers who have a headcount of 250 or more individual employees on the ‘snapshot date’ (for non-public authority employers, 5 April each year) must comply with regulations on gender pay gap reporting. 

The Guidance is set out in four separate pages, each dealing in helpful detail with an element of gender pay gap reporting. It is accessible from a step by step summary page and provides clarity for employers publishing their reports, including examples of who should be included in the calculations and how those calculations should be carried out. The Guidance covers in detail:

  • who needs to report their gender pay gap (including how employers should work out what their headcount is, and who should be included in that count);
  • the gender pay gap information employers must report (including deadlines for different types of organisations, and whether it is necessary to submit a written statement, action plan and narrative);
  • the gender pay gap data employers must gather (including how to determine ordinary pay, bonus pay and weekly working hours); and
  • how to make gender pay gap calculations.

Furlough

The Guidance provides important direction on how employers’ gender pay gap reports should reflect the pay of employees who have been furloughed in accordance with the CJRS. Where employees who were on furlough on the “snapshot date” have received reduced pay, they must be included in the headcount numbers in order to determine whether the gender pay gap reporting obligations apply, and they should also be included in the calculations relating to bonus pay. However, they should not be included in the gender pay gap calculations relating to hourly pay. Where employees’ pay on furlough has been topped up, those employees should be included in all relevant calculations.

Where furlough has had an impact on the hourly pay calculation in respect of a large number of employees, employers might wish to explain this by way of a narrative supplementing the data provided in the gender pay gap report. 

Conclusion

The Guidance provides a useful reminder of the need for employers to address their gender pay reporting obligations in a timely fashion – and for those who are close to the threshold number of employees to check whether they are subject to the resumed reporting obligation. It also provides useful assistance to those compiling gender pay reports, whether as required by the legislation or on a voluntary basis, with its step by step guide. Those publishing gender pay gap reports will still wish to consider how they present the data required to be produced – in terms of substantive commentary on the results of their reports – and how this feeds into their wider diversity strategies.

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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