Out-Law Analysis 4 min. read
04 Jun 2020, 4:58 pm
Analysis by Pinsent Masons, the law firm behind Out-Law has found that more than 5,000 employers chose to publish their GPG data for 2019 despite the UK government suspending enforcement of the GPG reporting deadlines for the year in light of the coronavirus pandemic and resulting pressures facing businesses. However, this represents approximately half of those who reported last year, amounting to a considerable drop in reporting.
Although there will be no repercussions legally for companies choosing not to report their GPG figures for 2019, companies should still do so if they are able.
The GPG reporting regulations require employers in Great Britain with 250 or more employees to publish their overall mean and median pay gaps based on gross hourly pay for men and women, expressed as a percentage; as well as their mean and median gender bonus gaps.
These employers are also required to publish the proportion of male and female employees within each quartile of their pay distribution, ordered from lowest to highest pay, as well as the proportion of both men and women that have been paid a bonus in the preceding 12-month period.
GPG data must be reported annually, with the latest reporting deadline of 4 April 2020 for reporting GPG data as at 5 April 2019.
Since the GPG reporting regime was introduced in 2017, it has become apparent that for the majority of companies there is no 'quick fix' solution. They are designed to promote sustained and positive change over the long term. Each year's data is significant in helping companies identify where issues lie and in relation to analysing whether any measures taken or policies already put in place have had, or are starting to have, the desired effect.
Reporting is also vital to retain and attract talent. Companies want to be seen as inclusive, flexible and forward thinking. To the extent progress has been made over the last couple of years, it would be unwise to ignore this years reporting and risk losing the momentum.
Last year more than 10,500 employers published GPG data for 2018. Analysis carried out by Pinsent Masons has found that, as at 22 April this year, 5,237 employers had published GPG data for 2019 despite the suspension of enforcement.
Our analysis found that only 63% of FTSE 100 companies have reported their results for 2019.
Whilst some employers have continued to publish a narrative alongside their figures to explain their figures, there has been a drop in the numbers who have done so with many employers choosing to simply report their figures. This is almost certainly as a direct result of the pandemic and the resulting additional pressures on employers.
While the data for 2019 is somewhat incomplete, there remain trends that can be identified, although as part of a much smaller data return.
Results show that 81% of female employees are working for companies that pay them on average less than their male counterparts. This is a slight increase from 78% in 2018.
The median pay gap for all those companies that have reported is 10.6% which is an increase from last year's gap of 9.6%. The median national average pay gap in 2019 is 17.3%. That figure is published by the Office for National Statistics and accounts for all employees and not just those who work for employers with more than 250 employees. Of the companies and public sector organisations that have reported their 2019 figures, almost a third of these have a median pay gap in excess of the 17.3% national average.
More than 50% of employers managed to reduce their median pay gap from that reported in 2018, but more than 42% reported an increase in the gap in their 2019 figures.
Our analysis also found that 7% of companies have reported no median gender pay gap between men and women, while 12% of companies reported paying women more than men.
However, in eight of the 22 sectors the government has defined for GPG reporting, men earn at least 10% more than women. In 29% of cases, that gap is over 20% in favour of men.
The sector in the UK economy with the biggest GPG is finance and insurance, where the median gap is 25%. However, 53% of the companies in that sector that have reported this year have reduced their median gap since 2018. The education sector has the second biggest median gap, of 22%, and construction the third with a 20% gap.
Other sectors have smaller gaps, including health, accommodation and food services, agriculture and household employers. Female employees in accommodation and food services earned just 0.6% less than male employees, for example. Many of the companies with a high concentration of women in the top quartile for pay are involved in the care industry.
Given the effect the pandemic has had on employers across the country we consider it likely that GPG reporting will be suspended for the 2020 figures. The 'snapshot date' on which the data is gathered would usually be 5 April, however by that point this year many employers had either furloughed a number of their employees or had agreed with employees to pay them at reduced rates. It is also likely that levels of bonuses will have been affected.
Approximately a quarter of employees across the UK have been furloughed and as a result the GPG data of many employers at 5 April 2020 will inevitably be unrepresentative of the true GPG picture. It will be impossible to compare the results of data from April 2020 to the results reported for April 2019 and previous years. If GPG reporting is not suspended for the 2020 figures, then employers will be advised to provide a narrative, which will most likely be based on the impact of Covid-19, of why the figures differ from previous years.
It remains possible that the government could decide to change the snapshot date for this year's reporting, but this seems unlikely. This is because a change in date would not allow for a true comparison across years since the date employers pay bonuses could in that scenario disproportionately affect the results. In addition, the furlough scheme has been extended to October making a change in the snapshot date highly unlikely given the undue pressure on employers in terms of the time they have to gather their data and run their analysis and the closeness to next year's reporting.
18 Apr 2019