Under the legislation that came into force in April 2017, UK employers with more than 250 employees are required to publish their gender pay gap. Known as The Gender Pay Gap Regulations, the legislation formed part of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 and led the way globally in terms of pay transparency and mandatory reporting.
The Government Equalities Office and the Equality and Human Rights Commission suspended enforcement of reporting for the 2019/2020 period because of the COVID-19 pandemic.
But the 2020/2021 reporting deadline is approaching quickly!
Here’s what you need to know in order to be prepared:
1. More than 60% of employers voluntarily reported for 2019/2020.
Despite the suspension, nearly 6000 employers (around 60%) have voluntarily reported their gender pay gap (GPG) information as of December 1, 2020. This is not too surprising with many already having their data prepared, and not doing so could suggest a lack of commitment and a backwards step away from equal pay. Reporting this year’s figures will provide an important baseline for the 2020/2021 reporting.
2. Coronavirus will impact gender pay gap reporting for the foreseeable future.
In the reference period of March 23 to April 5 2020, 27% of the workforce had been furloughed across the UK. Bearing in mind the snapshot date for the 2020/21 reporting period was April 5 2020, the gender pay gap data of many organizations is likely to be skewed - making it difficult to compare to prior years data and will also impact future years reporting. We also know the pandemic has disproportionally impacted women (and other minority workers), and with representation being a major driver of pay gaps, fewer women in the workforce might lead pay gaps to widen.
3. Organizations should consider adverse impact on women as they respond to the pandemic - as this will impact gender pay gaps.
Many teams are transforming their businesses and workforces as a result of the economic, societal and health impacts of the COVID-19 pandemic. To prevent adverse impact on women in the workplace, Business in the Community suggests organizations should consider the following carefully:
- Ensure cost-cutting measures do not disproportionately impact women;
- Promote company policies related to caring responsibilities at this time
- Embed remote working into the way jobs are designed in the ‘new normal’ – flexible working is proven to enable the recruitment, retention and progression of women at work.
If your team is not looking at these suggestions, unwelcome GPG reporting outcomes may be a repercussion.
Want the quick facts? Scroll to our 10 GPG Reporting Facts infographic.
4. Treatment of furlough pay is not covered by the current GPG regulations.
The concept of furlough pay did not exist when the gender pay gap regulations came into force. It’s worth noting that the current regulations exclude “full-pay relevant employees” from the average pay calculations. This means that if an employee is on any kind of leave and not being paid their full usual pay in the pay period, they are not full-pay relevant employees. We can expect further definitions on how furlough counts as “leave” or how to treat impacted employees.
5. The UK government has committed to undertaking a review of gender pay gap regulations in 2022.
The next scheduled review of the GPG regulations will be in 2022. This will hopefully address some of the concerns or weaknesses of the current regime including: requiring employers to submit more information on their policies to close their gender pay gap, and providing additional data (for example, maternity leave and job tenure).
6. Ethnicity pay gap reporting may be introduced in 2021.
Back in January 2019, the UK government closed its consultation on ethnicity pay gap reporting and no action has been taken since. Despite this, there has been an increasing number of employers voluntarily reporting - but the number is still small. The global events that caused the resurgence of focus on the Black Lives Matter movement led a number of parties urging the government to reconsider introducing mandatory reporting. In June, Prime Minister Boris Johnson responded back and confirmed that the Commission on Race and Ethnic Disparities would reconsider current legislation. Pressure is likely to mount on this issue.
7. A new parliamentary bill (The EPIC Bill) could shape future equal pay legislation.
A private members bill was submitted on October 20, 2020 to the House of Commons by Labor MP Stella Creasy. If it does become law, the Equal Pay Information and Claims Bill 2020 (also known as the EPIC Bill) will make it mandatory for companies with at least 100 employees to report on both their gender and ethnicity pay gaps. The next stage for the EPIC Bill is a second reading scheduled to take place in January 2021. This stage will require support from the government to make it into pay equity law.
8. A Fawcett Society report highlighted that GPG regulations have fallen behind other countries.
The Fawcett society published a comparative report comparing gender pay gap reporting legislation across 10 countries around the world. The report found that the UK is ‘unique in its light-touch approach’ and the two key areas where the UK appears to be out of step with other countries are: 1) the high minimum employee threshold for reporting (250 employees) and 2) the fact that there is no requirement to report on policies or action plans.
9. ONS data suggests that the headline gender pay gap figure fell to 7.4% in April 2020.
The ONS report released in November suggests that the headline gender pay gap figure fell to 7.4% in April 2020, down from 9% in 2019. The ONS said that its analysis "suggests that Coronavirus factors did not have a notable impact on the gender pay gap in 2020”. It’s important to note that the ONS analysis is based on the median hourly earnings of full-time employees as tracked by the Annual Survey of Hours and Earnings (ASHE). This is a different data set from that used to report under the Gender Pay Gap Regulations.
10. Many more firms are broadening their focus beyond GPG reporting and committing to pay equity as part of their ESG strategy.
Pay equity has now taken a firm place on the corporate agenda as firms consider broader environmental, social, and governance (ESG) concerns and redefine their purpose to generate a more positive impact on society and a nondiscriminatory working environment. Pay equity is one of the key ESG metrics used to measure progress. As a result, more companies are committing to a proactive pay equity audit to identify drivers of pay inequity so they can minimize litigation risks, protect their brand reputation, and promote diversity and inclusion in the workplace.
Now is the time to start your 2020/2021 GPG reporting
With these facts in hand, now is the time for organizations in the UK to start GPG reporting for the 2020/2021 period, to ensure timely submission for the 2021 deadline. Our self-serve gender pay gap technology helps support teams who need to comply with gender pay gap reporting, addressing pay inequities to help create a more productive, happy culture while stimulating the UK economy now and in the future. Calculate statutory figures, produce professional reports and analytics with your own branding, and run comparisons to better understand your gender pay gap challenges. If you need a hand, our consultants can guide you through the process. Do you know where your team stands on equal pay?