The analysis was based on pay as at April 2020 so the impact of the pandemic and furlough is not yet reflected in the figures. There have been widely reported concerns that the pandemic has had a disproportionate impact on women's employment and earnings, with one survey predicting that the gender pay gap may be set to double in 2021 due to the number of women either being furloughed or leaving employment altogether. It therefore now more important than ever that employers are gathering and analysing their gender pay gap data.
So what do you need to do in 2021?
Due to the impact of the Covid-19 pandemic, Government Equalities Office (GEO) and the Equality and Human Rights Commission (EHRC) suspended enforcement of the gender pay gap reporting deadlines for 2019-20 in March last year. In the end, approximately 6,000 employers reported their data anyway, compared to nearly 11,000 the previous year. The relatively high number of employers publishing statistics may have been down to the timing of the government's announcement. With only a month to go before the deadline, many employers had already carried out the necessary analysis.
However, despite the turbulence of the last year, and the continuing uncertainty faced by businesses and employers, this suspension was a one-off. Employers' gender pay gap reporting obligations have now been revived with the Government Equalities Office publishing new guidance on gender pay gap reporting on 14 December 2020.
The guidance sets out who needs to report their gender pay gap and over what period. The reporting requirements apply to private and voluntary sector organisations with a headcount of 250 at the "snapshot date." Public sector organisations are subject to different regulations in England, Scotland and Wales and the deadlines differ.
The snapshot date is the specific date each year on which gender pay gap calculations will be based. For private and voluntary sector employers the snapshot date for this year's reporting is 5 April 2020 and the submission deadline is 4 April 2021. Data can be submitted earlier if employers wish.
The guidance also explains the gender pay gap data you must gather. Employers will be familiar with the requirement to gather data of 'full-pay' employees and to exclude those who are paid less than their usual basic pay or none at all, because of being on leave at the snapshot date. Whilst this would normally mean that employees on annual leave or family-related leave are not counted as 'full pay' employees, the guidance makes it clear that this year those on furlough under the Coronavirus Job Retention Scheme should not be counted as 'full pay' employees unless they received a top up to 100% of their normal pay.
The guidance goes on to explain how to make your gender pay gap calculations covering the usual figures that must be calculated:
- percentage of men and women in each hourly pay quarter
- mean (average) gender pay gap using hourly pay
- median gender pay gap using hourly pay
- percentage of men and women receiving bonus pay
- mean (average) gender pay gap using bonus pay
- median gender pay gap using bonus pay
The gender pay gap information employers must report makes it clear that employers must also submit and publish a written statement along with their gender pay gap calculations. This statement must confirm that the published information is accurate and be signed by an ‘appropriate person’ like a director, designated member, partner, senior officer or the most senior employee.
Although not compulsory, an employer may wish to add a supporting narrative to help show what they have done to analyse and close the gender pay gap as well as signal their commitment to closing the gap. Similarly an employer may wish to publish an action plan, setting out clear, specific targets they are committed to achieving within a certain time frame.
Organisations should submit their data on the government's website: https://www.gov.uk/report-gender-pay-gap-data and the data and any supporting narrative should also be posted in an accessible place on the organisation's website
Where are we now in terms of Gender Pay Gap Reporting
In its annual report published on 22 December 2020, the Government Equalities Office reported a good understanding of gender pay gap reporting obligations by employers, with 89% of respondents indicating this. There continues to be little staff engagement with the publication of gender pay gap data with 81% of employers reporting little or no staff reaction. However, employers may have a role to play in this with only 15% adopting a comprehensive and active staff engagement strategy.
Only 23% of employers identified their gender pay gap as a high priority issue. Whilst 88% of employers included an explanation of the reasons for any gap, only 47% of employers reported that their board were taking action to address any gender pay gap.
Since 2016, the gender pay gap has been reducing. However, given the concerns highlighted above about the potential impact of the pandemic on gender pay gap, there is a risk that any progress made could suffer a severe setback and have a permanent impact on women's earnings. It is now more important than ever that employers are gathering and analysing their pay gap data and considering whether action needs to be taken to address the underlying reasons for any gap.
