As you may have seen in the news the deadline for gender pay gap reporting has been extended by 6 months from April to October. The Equality and Human Rights Commission announced last week that enforcement action against employers who fail to report their gender pay gap will start on 5 October this year, exactly 6 months later than previously planned. They say the change is due to the continuing impact of the pandemic.
The Government Equalities Office has published new guidance for employers following the change to the date which explains how the method of reporting remains the same, using the gender pay gap service. That service will be available to report gender pay gap information for the current reporting year until 5 October. Notwithstanding the extra time on offer, the Commission says it encourages employers to submit their data before the new deadline if possible, as many had planned to do. The Commission's chair is quoted in Personnel Today saying the October deadline ‘strikes the right balance between supporting businesses and enforcing these important regulations’. The CBI's UK policy director Matthew Fell is quoted saying how the pandemic cannot be allowed to undermine organisations’ commitment to tackling inequality. The other angle to this is last year's figures. In 2020 the enforcement of gender pay gap reporting for large employers was suspended due to a concern of the impact of reporting on employers. Felicia Willow, CEO of the Fawcett Society, is quoted saying she believes the government's pandemic policy response has disproportionately impacted on women, particularly at work, and she has written to the government arguing that reporting should not remain unenforced in 2021 – she was one of a number of signatories making that case.
So let's get a view on all these points. You'll recall that gender pay gap reporting for the private sector was introduced back in 2017 and Helen Corden has been advising clients on this year-on-year since then. Helen joined me by video-link from Birmingham. I started by asking if the delay to this year's reporting deadline was unexpected:
Helen Corden: “I don’t think the delay is entirely unexpected. There had been lots of rumours in the press and I know the government was taking soundings in relation to whether the enforcement of the regulations should be suspended in their entirety for a second year. As we know the enforcement of the regulations was suspended last year and I think there was a fear that they would be suspended again for a second year. So I think actually this delay in the enforcement is a good compromise because it means that companies still do have to report, but for those companies that might need a bit of extra time in order to gather their data or, perhaps more importantly, put in place a narrative, it gives them that additional time in order to do so and file their reports."
Joe Glavina: "Can I ask you about what the Fawcett Society is saying? They point to a report that came out at the end of last year from the Women and Equalities Select Committee showing how the pandemic has hit women hardest, particularly at work. Could that have an impact on reporting?"
Helen Corden: "Potentially, it could have an impact on the statistics and I think this is a point that companies really need to be alive to when they are looking at the data and their figures arising from the snapshot date last year. So if we take an example, for an organisation who has perhaps placed a large number of its females who are on lower pay on furlough, this might actually have a positive impact on their gender pay gap because under the amended regulations those employees who were on furlough and not in receipt of full pay are excluded from the calculation. Now, if you have a number of females who are on low pay excluded from the calculations, that might have the effect of driving up the hourly rate of pay for females, which then has the knock on effect of making the organisation's gender pay gap look more positive, i.e. bringing the gender pay gap down, and obviously that will be an artificial impact because once, and if, the females are brought back from furlough, then the gender pay gap may go up again. So companies need to be really careful that if furlough has had an impact on their gender pay gap that they explained that in their accompanying narrative and the delay in the enforcement of the regulations will give companies the time to be able to frame that narrative properly."
Joe Glavina: "Reporting was suspended last year, and there is no requirement to report that data, but presumably employers can do so if they want to. That's obviously more work so do you think they should?"
Helen Corden: "For those companies who didn't report last year, it may well be that they want to look at calculating their gap for last year, if they haven't done so. Many companies will have done so but just chose not to report so they may already have the data. For those companies who didn't compile the data for last year, they may want to do so this year, so that they can do a better year-on-year analysis as to how their gender pay gap has changed, if at all, and for those organisations for whom furlough may have impacted on their gender pay gap they might also want to carry out a second calculation looking at the impact on the gender pay gap if the furlough was discounted, so including the individuals in their calculation because that will give them a better year-on-year analysis and indication of how their gender pay gap is changing."
We referred earlier to the joint statement demanding reinstatement of gender pay gap enforcement. That statement can be accessed from the Fawcett Society's website and we have put a link to that in the transcript of this programme. We have also put a link to the report by the Women and Equalities Committee highlighting the unequal impact of the pandemic.
- Link to Fawcett Society (joint statement on gender pay gap enforcement)
- Link to report by Women and Equalities Committee on unequal impact of the pandemic