Government reforms (1): Return of the Gender Pay Gap

What do we already know?

In our April 2020 Newsletter Government reforms (4): Gender pay gap reporting – suspended! we updated you that the enforcement of gender pay gap reporting was suspended for the 2019/20 reporting year, due to pressures on businesses of the COVID-19 pandemic.

What’s new?

Despite suspension of reporting last year, it’s actually the 20/21 reporting year that is likely to concern employers.  They will be required to analyse their pay data from April 2020 at a time when potentially a significant number of their employees had been furloughed on reduced pay and more staff than usual may have been off work due to sickness.  They may also not have had the usual capacity this year to progress initiatives aimed at reducing the gender pay gap.

However, the 2020/21 reporting deadline is now just around the corner, with public sector bodies required to publish their figures no later than 30 March 2021 and all other eligible companies required to do so by 4 April 2021.

As a reminder of the scope of the reporting obligations, employers with a headcount of 250 or more employees must report their gender pay gap using data from a “snapshot date“. For public sector bodies, this snapshot date is 30 March 2020 and, for all other companies, the snapshot date is 5 April 2020. Where a company is part of a group, each separate legal entity with a headcount of more than 250 employees must report its own information, rather than that of the group. Companies with a headcount of less than 250 can also volunteer to report their gender pay gap.

This pay gap information must be submitted online and employers can opt to submit a supporting narrative and employer action plan along with their gender pay gap. All of this information can then be accessed by the public here.

GPG calculations can create quite a burden in terms of time and resource in a year when HR is already rather stretched and furlough of staff may have further complicated your data.  If you need assistance with your calculations and submissions, our Pay & Reward service can help you.

We provide a range of solutions to suit your budget; from a simple ‘sense check’ (reviewing the data you have collected and your calculations) to a full Equal Pay Audit & Assessment.  If you’d like to know more, please contact Lindsey Newman: lindsey@menzieslaw.co.uk / 0117 325 0526.

New Guidance

The Government Equalities Office has launched a new collection of gender pay gap guidance (available here).  The guidance breaks down the pay gap process into four steps and features a series of guidance documents which are designed to support employers through the reporting process.

The guidance covers:

• which organisations are caught by the reporting requirements;
• what relevant data must be gathered;
• how to carry out the calculations; and
• how to publish a pay gap report.

A question that many employers will need to consider this year as a result of the pandemic is how furlough affects their gender pay gap reporting obligations. In summary:

• furloughed employees should be included when assessing whether the 250 employee threshold for triggering the gender pay gap reporting regulations is met;
• furloughed employees should also be included in the gender pay gap calculations relating to bonus pay;
• however, if the employer did not ‘top-up’ furlough pay, the furloughed employees should not be included in the gender pay gap calculations relating to hourly pay.

If gender pay gap calculations are significantly impacted as a result of placing employees on furlough, employers may wish to consider including an explanation for the changes in their narrative.