Gender pay gap reporting: what employers need to know for 2021

Earlier this month, a report from European Women on Boards showed that, despite some encouraging progress in recent years, the under-representation of women on corporate boards and in management positions remains an important challenge to European countries, including the UK, and contributes to the gender pay gap. Some 13 % of the 669 companies studied were close to gender equality at board and executive level. It found 87 companies where the absolute share of women in leadership is 40% or more, a significant improvement from 47 in 2019. However, it also found a big gap between those companies which were progressing and those which weren’t. In the UK gender pay gap audits are one way of monitoring progress, but the audits were cancelled last year due to Covid. This year employers must once more file. Here Kate Palmer from Peninsula UK highlights their responsibilities.

The requirement for businesses to publish gender pay gap reports was cancelled in 2020 due to COVID-19. However, gender pay reporting is back on the agenda for 2021, so is there anything new that employers need to know?

The gender pay gap, the difference in the average earnings between men and women, has been a significant cause for concern for many decades. Usually felt by women, and while it shows signs of closing, the gap remains a symbol of inequality between the sexes. In an attempt to address this, the Government introduced an obligation on employers with at least 250 members of staff to publish data on the salary of their male and female employees annually – a ‘snapshot’ of their gender pay data.

Due to the coronavirus outbreak, the Government Equalities Office (GEO) and the Equality and Human Rights Commission (EHRC) suspended enforcement of the gender pay gap deadlines for 2019/20, meaning there was no expectation on employers to report their data. The Government has since confirmed that gender pay gap reporting will return and that eligible employers in the private sector will need to produce a report by 4 April 2021. The report deadline is set at 30 March 2021 for the public sector.

Government guidance goes on to say that for employers’ 2021 reports, they should:

• focus on the ‘snapshot’ date of 5 April 2020 in the private sector
• focus on the ‘snapshot’ date of 31 March 2020 in the public sector
• take furloughed staff into account when considering whether their business meets the requirement of having at least 250 staff on the snapshot date and is required to produce a report
• not include employees in the ‘reporting pool’ if they were not on full pay on the ‘snapshot’ date – meaning that any member of staff who was furloughed, and who did not have their pay topped up to 100%, can be discounted from the report for the purposes of hourly pay calculations
• include furloughed staff in any calculations relating to bonus pay, regardless of whether their salary was “topped up” to 100% or not.

Due to the impact of coronavirus, employers may find that the results produced by their report show an increase, or decrease, in the gap that may not be representative of reality. With this in mind, it is crucial that any report produced is combined with a detailed explanation of the figures. If there is a substantial change, employers should explain that this is as a result of the number of staff on furlough or other coronavirus-related impact.

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