New guidance on gender pay gap

Enforcement of the gender pay gap reporting requirements was suspended in light of the pressures of Covid-19. It is now back to “business as usual” and the 2021 deadline is just around the corner.

Emily Shaw is an associate in Dentons’ Glasgow office. She is a member of the People, Reward and Mobility practice group. Emily focuses on a wide range of UK employment law issues.

By Emily Shaw

What are the gender pay gap reporting requirements?

The gender pay gap is the difference between the average earnings of men and women across a workforce. Employers of a particular size must report and publish their gender pay gap information each year. This information is published on the government website and the employer’s own website. The rationale behind the requirements, which were introduced in 2017, is that by requiring companies to evaluate and publish their gender pay gap information, they will better understand their pay gap and be encouraged to take steps to close it.

Who is required to report their gender pay gap?

Employers with a headcount of 250 or more employees must report their gender pay gap using data from a “snapshot date”. For public sector bodies, this snapshot date is 30 March each year and, for all other companies, the snapshot date is 5 April. Where a company is part of a group, each separate legal entity with a headcount of 250+ employees must report its own information, rather than that of the group. Companies with a headcount of less than 250 can also volunteer to report their gender pay gap.

How do employers report their gap?

This pay gap information must be submitted online and employers can opt to submit a supporting narrative and employer action plan along with their gender pay gap. All of this information can then be accessed by the public online. The information must also be published on the employer’s own website (and it must stay there for three years).

What did the government publish in December?

On 14 December 2020, the Government Equalities Office launched a collection of guidance. The collection breaks down the pay gap process into four steps and features a series of guidance documents which are designed to support employers through the reporting process. The guidance covers: which organisations are caught by the reporting requirements; what relevant data must be gathered; how to carry out the calculations; and how to publish a pay gap report.

Does the new guidance change the reporting requirements?

No – the reporting requirements have not changed. The guidance is there to support employers in complying with the requirements before the relevant reporting deadline. This new collection also serves as a helpful reminder of the proximity of the reporting deadline, which may have fallen to the bottom of some employers’ “to do” lists whilst they have been reacting to changing government coronavirus restrictions in recent months.

Do the figures which were due to be reported by 4 April 2020 need to be reported this year?

No. The figures that were originally due to be reported by 5 April 2020 (the requirement for which was dispensed with by the government in March 2020 in light of the pandemic) do not need to be reported.

Does it make any difference if the employer had furloughed staff at the snapshot date?

As the new guidance confirms, furloughed employees should be included when assessing whether the 250 employee reporting threshold referred to above is met. When it comes to the calculations themselves, furloughed employees should be included in the calculations relating to bonus pay. However, unless the employer “topped up” the 80% furlough pay to 100%, the furloughed employees should not be included in the gender pay gap calculations relating to hourly pay.

It may be helpful, where calculations have been impacted by the number of employees on furlough, to submit an explanation of this within the supporting narrative which accompanies the pay gap figures.

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