How has Covid-19 changed Gender Pay Gap Reporting?

Gender pay gap reporting was first introduced by the Government in 2017. Regulations require employers with over 250 employees to report the average difference in pay between men and women in their organisation. This difference is calculated based on a “snapshot” date which is 5 April each year for private and voluntary sector employers, and 31 March for public sector employers. Mandatory gender pay gap reporting has shone a spotlight on the issue of pay disparity between men and women, and over the past several years the gender pay gap has been slowly narrowing.

However, there is cause for concern that the Covid-19 pandemic will have undone some of the progress that has been made. Our Employment Law team here discusses how gender pay gap reporting and the gender pay gap may have been affected by the pandemic and the steps employers need to take to ensure they are compliant with the regulations moving forward.

How has gender pay gap reporting been affected by Covid-19?

The deadline to submit gender pay gap data for private and voluntary sector employers is 5 April 2021 and employers are encouraged to meet this deadline if possible.  However, due to the effects of Covid-19 on businesses, the Equality and Human Rights Commission (EHRC) has announced it will not enforce employer gender pay gap reporting obligations until 5 October 2021. This effectively gives employers an extra six months to submit their gender pay gap data.

Gender pay gap calculations may also be complicated this year due to the introduction of furlough leave. Any employees who are furloughed on the snapshot date must be included in your employee headcount. You must also include in your pay gap calculations any employee who is furloughed but whose pay is topped up to their full amount.

The case is slightly different for employees who are on furlough and as a result are not receiving their full pay. Such employees should be excluded from the following calculations:

• the average (mean) gender pay gap using hourly pay
• the median gender pay gap using hourly pay
• the percentage of men and women in each hourly pay quarter

All employees, including those on furlough, should be included in calculations relating to bonus pay.

How is the pandemic expected to impact the pay gap?

The Office for National Statistics has reported that the gender pay gap has decreased from 17.4% in 2019 to 15.5% in 2020. However, we will not know the true gender pay gap until employers have submitted their data, so this figure may change.

There are fears that the Covid-19 pandemic will have made the gender pay gap worse. This is due to the fact that mothers may have been more likely to stay at home to look after children during the pandemic. A report by the UCL Institute of Education and the Institute for Fiscal Studies found that in the spring of 2020 mothers were 47% more likely to have lost their job and that those who worked from home were more likely to be interrupted by other responsibilities such as childcare. The pay gap may also be widened due to the fact that women are heavily employed in the service industry which is one of the industries hit hardest by lockdowns.

What are the consequences for failing to report?

The EHRC has the power to investigate an employer who fails to report their gender pay gap figures. If you have been found to be in breach of your gender pay gap reporting obligations, the EHRC may seek a court order requiring you to remedy the breach. If you fail to comply with the court order you could be subjected to unlimited fines.

You may also harm your business’s public image if you fail to comply with gender pay gap reporting. No employer wants to be seen as having a large gender pay gap and failing to report your pay gap figures could create the impression that there is large pay disparity at your business, or that you are not committed to closing the gender pay gap. Submitting your data gives you the opportunity to demonstrate any progress your business has made towards closing the pay gap and to outline any plans you have in place to further narrow the gap.

As an employer, reviewing your pay and reporting your figures can be an arduous and complex task, particularly with the additional complication of furlough leave.  If you have any questions regarding the gender pay gap reporting, or other Employment Law issues relating to the coronavirus pandemic, you can contact us on 023 8071 7717 or email employment@warnergoodman.co.uk.

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ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.