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Gender pay gap reporting under the microscope

BY Ed McFarlane
Employment Law & HR

On 4th April 2021, for most large employers (250+ staff), it will be time to report on the workplace gender pay gap. In March 2020, the UK government scrapped enforcement of the reporting requirement for that year only due to the coronavirus pandemic.

For many employers, the gender pay gap results for 2020/2021 will be impacted by furlough pay. Firstly, working out how to categorise employees may be complicated since if an employee had been on furlough on the ‘snapshot date’ (5th April 2020) and didn’t get full pay, that employee would not count as a ‘full-pay comparable employee’ as their pay had been reduced by a form of ‘leave’. The Government Equalities Office has confirmed that for reporting purposes, employees on furlough on the relevant date do not count as ‘comparable full-pay employees’ when looking at pay levels to report. Data for the 2021 round of gender pay reporting will therefore be skewed by a large number of employees being taken out of the comparison. However, employees furloughed and on full pay do count as ‘full-pay comparable employees’. It may take a bit more digging into the data for employers to correctly report gender pay data, and to address the impact of furlough leave on pay levels in any statement accompanying the report.

Looking at the data available for 2020, a study by Rest Less based on data from the Office of National Statistics points to some marked differences in the gap across age groups, with a 23% gender pay gap for women in the 50s, in monetary terms earning £8,427 less per year than comparable men. This data comes from a survey of around 1% of firms required to report gender pay data, and it includes the impact of furlough pay.

However, the overall trend of the gender pay gap has been for it to narrow, with a clear trend of the gap broadening with increasing age, for people in their 30s, the gap may have been as low as 3% in 2020. The impact of redundancies is yet to be seen, with some indications that women were more likely to have been made redundant than men in 2020.

Looking forward, a Private Member’s Bill before Parliament may introduce changes in Gender Pay Gap Reporting, The Equal Pay (Information and Claims) Bill, significant changes could include lowering the reporting threshold to employers with 100 or more staff, allowing employees to ask for information on a specific colleague’s pay, and widening pay reporting to include comparisons between employees of different ethnic origins. The Bill has only had a ‘first reading’ so far, meaning that it has been announced in the House of Commons, but no date has been set for it go further yet. If the Bill is to progress, it would probably be taken up by the Government as an opportunity to expand gender pay reporting.

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