Six month suspension to the enforcement of gender pay gap reporting

The EHRC recently announced that employers have a six month extension to report their gender pay gap (GPG) for last year’s snapshot date. The normal GPG reporting deadline each year is 4 April, but the EHRC has said that enforcement action will not begin until 5 October 2021. The EHRC are encouraging those companies who can report their GPG by 4 April 2021 to do so.

In March 2020, because of the pandemic, the decision was taken by the Government Equalities Office and the EHRC to suspend gender pay gap reporting. This related to the snapshot data taken in 2019, since there is a one year delay between the data capture and publication.

Despite the suspension 6000 companies still submitted their reports for the 2019 data. The EHRC has said that the decision this year is about finding “the right balance between supporting businesses still impacted by the pandemic and making sure employers comply with the law.”

What issues should employers consider in relation to this year’s GPG reporting figures?

Identify all relevant employees who received less than full pay on the snapshot date in 2020

For those employers who have still to run their calculations for last year’s snapshot date (5 April 2020 in the private sector and 31 March 2020 in the public sector in England) they should ensure that their figures properly reflect the impact of the pandemic and any corresponding reduction in employee pay through furlough or other measures.

Any employee who receives less than full pay is not a “relevant full pay employee” and should be excluded from the calculation for the mean and median gender pay gap calculation and for the quartile reports. Employees who were furloughed (where an employer was not topping up pay) should not be included. In addition those employees who took unpaid leave for child care or were receiving SSP or other leave where they were paid less than full pay should not be included. The EHRC has published detailed guidance on how employers should deal with employees who were furloughed.

Bonus pay figures use a different criteria: relevant employee

Employers should also note that the rules about excluding employees on less than full pay do not apply to the calculation of the bonus pay gap figure, where the criteria used is “relevant employee”. Relevant employees receiving less than full pay should still be included in the bonus pay gap figures.

Overall impact on reports?

It is likely that where workforces were significantly affected by Covid-19, employers will produce a GPG figure and quartile data which presents a distorted picture of the gender pay gap in their workforce. If the impact is significant, one possible option is to do an additional set of figures by looking at the numbers on 5 February (or 5 March if there was still no impact then) before lockdown and putting this into the narrative. However, this may not be a terribly productive exercise since all comparisons of data will be based on the official figures plugged into the site. Employers may instead prefer to add a section into the summary or narrative to explain that the pandemic has had an impact on their figures, outlining how many employees were receiving less than full pay. The CBI are recommending that where figures are affected by the pandemic, businesses should make it clear that this has been the case, and also what action they are taking to close the gap.

For more information on calculating the gender pay gap and steps employers can take please see our gender pay gap video and gender pay gap guide.