5 October 2021 deadline
Less than two weeks before the gender pay gap reporting deadline in 2020, as a result of the start of the pandemic, the Government told employers that they did not have to publish their gender pay gap statistics for 2019-2020. Due to the continuing effects of the pandemic, the Equality and Human Rights Commission (EHRC) later confirmed that gender pay gap enforcement action for the reporting year 2020-2021 would be suspended for six months until 5 October 2021.
The deadline for 2020-2021 statistics is therefore fast approaching. Despite this, the latest submission figures indicate that many employers may miss the deadline. As at 1 October 2021, around 6,900 employers had submitted their reports, out of an estimated 11,000 eligible organisations.
Furlough and gender pay reporting
In December 2020, the Government released guidance to clarify how furloughed employees should be dealt with for the purposes of gender pay reporting. The key takeaways are:
- When determining whether or not a business meets the reporting threshold of 250 employees, furloughed employees should be counted.
- Furloughed employees will be excluded from gender pay gap and salary quartile band calculations if their salary has not been "topped up" to full pay. This is because these calculations cover "full-pay relevant employees" only.
- Furloughed employees will be included in gender bonus gap calculations.
This means that employees who were paid less than their full salary on the "snapshot" date of 5 April 2020 (for private sector employers) are excluded from gender pay gap and salary quartile band calculations. As a result, an employer's statutory gender pay gap statistics will not be properly representative. Employers may therefore wish to consider carefully whether to run additional calculations based on the hypothetical scenario that employees had not been furloughed, and either include those results in their report or in a supplementary update on their website. This will provide a more accurate picture of the data and help drive accountability and action.
For more information on the impact of COVID-19 on gender pay gap statistics, please see our articles published in the Employment Law Journal and Executive Compensation Briefing.
New toolkit published by the EHRC and CMI
The EHRC and Chartered Management Institute have created a practical toolkit to help employers drive action in tackling their gender pay gap. The toolkit contains:
Real-life case studies.
Recommended actions (including providing a flexible working culture, enhancing or encouraging uptake of shared parental leave and using apprenticeships etc. to improve talent pipeline).
Practical "how to" guides from the Behavioural Insights Team.x
The publication of the toolkit follows a warning from the EHRC that the pandemic has disproportionately affected women and that employers should be looking beyond the numbers and start considering what action to take to close their gender pay gaps. Given that the EHRC can, from 6 October, again take enforcement action against employers who fail to comply with their gender pay gap reporting obligations, employers may wish to proactively analyse any pay gaps within their organisations and consider taking meaningful action to address them.
If you would like assistance with preparing your gender pay gap report or with any issues arising from your gender pay gaps, please get in touch with your usual Mishcon contact or with a member of the Employment team.