Gender Pay Gap Reporting in 2021
If you are an employer with 250 or more employees, then under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, you have to report specific figures relating to the gender pay gap each year.
The purpose of the Regulations
This helps to identify how large an organisation’s pay gap is, and what might be causing it. In this way, issues that need to be addressed can be highlighted and the organisation can take steps to rectify them. Repeating this exercise year on year, as the Regulations require, will show how effective these remedial actions have been and that can help to highlight any changes that are needed.
It should be remembered though that the existence of a gender pay gap is not automatically evidence of discrimination.
The changed deadline
For businesses in the private sector, the reporting deadline is usually 5th April, but because of the degree to which the COVID-19 pandemic has affected the country, the economy and businesses, the Equality and Human Rights Commission (EHRC) – the regulating body for the gender pay gap - has announced that employers will have an additional six months after the current deadline to report their gender pay gap information. All employers, both public authority and private sector as well as voluntary sector, now have until 5th October 2021 to make their report.
The EHRC stresses that no enforcement action will be taken as long as the report is made by the revised deadline.
What do the regulations require?
The regulations require all organisations with 250 or more staff to publish the difference between male and female pay at different levels of seniority within their organisation.
Six calculations are required by the Regulations. They will show:
The mean gender pay gap in hourly pay.
The median gender pay gap in hourly pay.
The mean bonus gender pay gap.
The median bonus gender pay gap.
The proportion of males and females receiving a bonus payment.
The proportion of males and females in each pay quartile.
‘Mean’ is the average hourly rate of pay. Employers can work this out by adding the hourly pay rate for employees, then dividing this by the number of employees.
‘Median’ is the mid-point when the hourly pay rates are arranged in order from lowest to highest.
Previous changes for the 2019/20 reporting year
In the 2019/2020 reporting year, enforcement was suspended entirely. That year used a snapshot date of either 31st March 2019 or 5th April 2019. This means that employers will not be expected to report their gender pay gap information for 2019/2020, either now or at a later date. This is only an expectation though and does not prevent employers who wish to report their pay gap information for that year from doing so. Some have done so voluntarily.
The EHRC has the power to take enforcement action against employers that do not fulfil their obligations under the Gender Pay Gap Reporting Regulations. Non-compliance may also lead to court action.
The enforcement policy can be found here:
The first step the EHRC will take is to begin an investigation to establish whether the employer is actually breaching the regulations. If this turns out to be the case, the EHRC will try to get a court order that will require the employer to take action to remedy the breach. If the employer does not comply with the court order, they will be committing an offence that will lead to an unlimited fine on conviction.
The EHRC will also publish details of any employer that they investigate on their website.
What should employers do?
Employers should still report their gender pay gap information using the Gender Pay Gap service. https://www.gov.uk/report-gender-pay-gap-data
As well as reporting the 2020 snapshot figures, employers will also be able to report information for the next reporting year, 2021/22, which will use a snapshot date of either 31st March 2021 or 5th April 2021 from the beginning of April 2021.
The extension of the reporting deadline will come as a welcome relief for many employers who were struggling with gathering information on the figures and trying to work out how to take the furlough into account. However, the deadline has only been postponed, rather than waived, so efforts should continue to gather the required information. If employers are unsure about how to go about submitting a report, they should consult either their legal advisor or check with the many guidance articles on the government website.