The enforcement of gender pay gap reporting was suspended in 2020 as a result of the unprecedented times we found ourselves in due to COVID-19, meaning there was no expectation on employers to report their data.
The Equality and Human Rights Commission (EHRC) has recently confirmed that there is no longer a requirement to report on their gender pay gap for 2019/2020.
Gender pay gap reports will need to be published for 2020/21 but affected employers will effectively have until 5 October 2021 to do so (rather than the typical 30 March/4 April publication date) as EHRC will not take any enforcement action provided employers report by 5 October 2021. Employers are still encouraged however to report by the usual deadlines.
How will it work in the light of COVID-19?
Gender pay gap reporting requires employers (with 250 or more employees) to publish the results of various calculations showing the differences between pay and bonuses for male and female staff each year. The calculations are generally based on employers’ payroll data drawn from a specific date each year. This date is referred to as the “snapshot date”. This is 31 March for most public authority employers and 5 April for all other employers. Ordinarily the obligation to report would be to do so by 30 March/4 April the following year.
On 31 March and 5 April 2020, some employers will already have had employees on furlough.
The standard rules on reporting dictate that those who are not on full pay on the snapshot date are to be omitted from the pool of employees to report from. This therefore created some confusion around the treatment of furloughed employees. The Government has now released much awaited guidance and the key take away points are:
- Any employees who were on furlough on the snapshot date must still be taken into account when calculating total headcount for the purposes of gender pay reporting;
- Employees who were on furlough on the snapshot date and receiving full pay must be included in all gender pay and bonus calculations;
- Employees who were on furlough on the snapshot date and receiving less than full pay must be excluded from the pay comparison calculations but included in the bonus calculations.
Some employers may be under the misconception that they would no longer need to report on their data because their staff numbers have dropped below 250 as a result of COVID-19. However, employers are reminded that the relevant snapshot date for 2020/21 reporting is 31 March/5 April 2020 and so if on that date employers still had at least 250 employees (furloughed or not), they must ensure that they report on their gender pay gap accordingly.
Narratives for 2020/21 reports, which are not mandatory but are commonplace, may need to consider and explain the impact of COVID-19 on the data results. The inclusion of furloughed employees on reduced pay when calculating gender pay gap would naturally have affected the results and not been a true representation of reality. However for a business which may have had a larger proportion of male employees on furlough on the snapshot date (for example trades staff), their exclusion from the calculations altogether may also not reflect a true representation of the gender pay gap from a year-by-year perspective. Employers may want to provide an additional level of analysis in any narrative by looking at what those figures might have looked like in a COVID-free world.
If you require any assistance in relation to gender reporting, do not hesitate to contact a member of the team.