Would a further suspension of Gender Pay Gap reporting this year save a potential PR disaster for many companies?

The requirement to provide a Gender Pay Gap report has been in force for the majority of companies with more than 250 employees since April 2017. Last year, the Government suspended the requirement for companies to file their reports for 2019/20 as a result of the Coronavirus outbreak and have not yet announced whether they will continue this suspension for 2020/21.

Overview of Gender Pay Gap Reporting

Gender pay gap reporting was introduced by the Government as a way to encourage companies to bridge the pay gap between men and women which had been recorded every year by the Office of National Statistics since 1997. Companies (public and private) with over 250 employees have to provide a report detailing the following:

  1. The overall pay gap figures with both the mean and median average hourly pay
  2. The proportion of men and women in each quartile pay band
  3. The mean and median of bonus payments and the differences found between men and women
  4. The proportion of men and women who received bonuses in that year
  5. A written statement by a senior staff member confirming that the information provided is accurate

Companies do have the option to provide a narrative which explains any disparities and also give details of any changes they will be implementing as a result of those. The Government Equalities Office (GEO) and ACAS have issued guidance to assist organisations in complying with their requirements and they continue to update that guidance every year.

The report must be published on the Company website and made available for at least 3 years as well as submitting the report onto the Government website. Failure to comply with the reporting obligation could result in civil or criminal sanctions. The Government have also stated that they will compile and publish a table of companies, by sector, that have failed to provide a gender pay gap report which could be a PR disaster for many.

Impact of Covid-19 – suspension of the reporting requirements

Last year, the GEO suspended the requirement to publish the 2019/20 report as a result of the pandemic and it is yet to be confirmed whether the same will be agreed for 2020/21 reporting requirements. Should the figures be published, it is suspected that the gender pay gap will show even larger disparities between the pay of men and women as a result of the ongoing pandemic. The introduction of voluntary furlough and closure of schools/nurseries is likely to disproportionately affect women who are, statistically speaking, more likely than men to have caring responsibilities. The likelihood is that a larger proportion of women are either having to leave their jobs entirely, work from home on a reduced hours basis or request voluntary furlough as a result to try and fulfil their care responsibilities. If you consider that furlough pay is currently 80% of wages (with an option to ‘top up’ at a Companies discretion) paired with the fact that the majority of part time workers in the UK are women, the gap is likely to be even larger than what has been seen in previous years. This is likely to differ from sector to sector as a company with a larger proportion of women will have very different results to a company whose workforce is largely men. Therefore if Gender Pay Gap reporting goes ahead this year, due to the impact of Covid19, it could potentially be a PR disaster for many companies.

Next steps for Companies

Even though the GEO have yet to confirm whether companies will be required to publish their reports this year, it would be advisable to make a start on compiling the data required and consider whether you will include a narrative with your report. The deadline for reporting is 5 April 2021 so there is still some time to deal with this. However should you have any questions about Gender Pay Gap reporting and your obligations or if you require any employment law advice, please do not hesitate to contact a member of our multi-award winning Employment Law team

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

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