Due to the Coronavirus outbreak, the Government Equalities Office and the Equality and Human Rights Commission have this morning (24 March 2020) suspended enforcement of the gender pay gap deadlines for this reporting year.
The decision means that there will be no expectation on employers to report their data. The full announcement is available here.
Nevertheless, about 26% of employers required to report have already done so, and we expect many more to have been working hard to get the data ready for publishing by the deadline. Below is a reminder of what the report is, who it applies to and how to comply with the requirements.
Does this apply to me?
The regulations introduced in 2017 apply to all companies who employ 250 or more employees in the UK on the snapshot date (this is 31 March each year for public service organisations and 5 April for private companies and charities). The definition of employee, for the purpose of the gender pay gap report, is wider than otherwise and includes workers and some self-employed individuals as well.
Employers within a group structure should seek advice but generally each entity will have to report separately, and there is no obligation on groups to consolidate data or parent companies to report on behalf of subsidiaries, nevertheless, it may be a useful exercise to do so. Smaller companies can also report on a voluntary basis which we would recommend, especially for companies about to reach the threshold of 250 employees, in order to establish the correct process and ensure all the necessary data is captured.
What is the Gender pay gap?
The gender pay gap is the average difference between hourly wages for men and women. It is important to note this is not the same as equal pay, although the two are often misunderstood and mixed up. The mandatory gender pay gap report also must contain other related statistics; in total an employer must publish six calculations showing their:
- Average gender pay gap as a mean average
- Average gender pay gap as a median average
- Average bonus gender pay gap as a mean average
- Average bonus gender pay gap as a median average
- Proportion of males receiving a bonus payment and proportion of females receiving a bonus payment
- Proportion of males and females when divided into four groups ordered from lowest to highest pay
The data from 2019 reports revealed that men are typically paid significantly more than women in most UK businesses. Despite efforts and campaigns by women’s rights groups to close the gap, the results found that the gender pay gap had widened in favour of men in the past year, since the 2018 reports were published.
What is the deadline?
The deadline for publication of the reports is 30 March 2020 for public service organisations and 4 April 2020 for private companies and charities. [Note that the enforcement of these deadlines has been suspended due to the Coronavirus pandemic.] This report will contain the analysis of data captured on the snapshot date last year (31 March 2019 for public service organisations and 5 April 2019 for private companies and charities).
Once the report is completed and published the organisations should also ensure that they capture the data for the next report. The snapshot dates are 30 March and 4 April 2020 and the publication will be due on 31 March and 5 April 2021.
How do you calculate the required statistics?
The legislation and corresponding guidelines contain instructions for calculating the necessary statistics, however it will still take some data manipulation skills to correctly make the necessary calculations. Our HR Consultancy team is always on hand to assist you.
Organisations must publish the report so that it is accessible to all employees and the wider public. The information must be published on their own website (together with any accompanying narrative) and be retained online for three years. The information must also be uploaded to the Government website. Care should be taken that only the results are published and the documents don’t contain any personal information that could be a breach of data protection laws.
In August 2018, the parliamentary Business, Energy and Industry Strategy (BEIS) committee recommended that gender pay gap reporting be widened to apply to all organisations with more than 50 employees. This has not been implemented to date, but it may be in the future, especially as a number of smaller employers are already voluntarily following the reporting legislation.
In October 2018, the Government launched a consultation to determine if mandatory reporting of ethnicity pay gaps would help to address pay disparity. The Institute for Public Policy Research called for pay gap reporting to be extended to cover disability pay gaps as well. In response to these calls, Hilary Spencer, Director of the Government Equalities Office, told MPs in June 2019 that there was “probably an argument” for changing the reporting requirements from 2021 and that there would be a formal review of the legislation in 2022.
We will update you accordingly when any new developments arise.
If you have any questions or concerns regarding Gender Pay Gap Reports or COVID-19, please get in touch with our HR Consultancy team.