Firms must report gender pay gap, confirms UK Government

After much confusion, the UK Government has confirmed that companies must file in their gender pay gap reports for 2020-21.

However, those that are struggling to meet the 4 April deadline will be given a six-month reprieve (until 4 October 2021) before any enforcement action is taken against them, confirmed the Equality and Human Rights Commission (EHRC).

“Gender pay gap reporting regulations will be enforced this year and we encourage all employers to report by the deadline if possible. The approach we are taking strikes the right balance between supporting businesses still impacted by the pandemic and making sure employers comply with the law,” stated EHRC Chair Baroness Kishwer Falkner.

CALLS TO REINSTATE PAY GAP REPORTING

Over the last few weeks, equality charities and business leaders called on the Government to urgently reinstate gender pay gap reporting to ensure the pandemic does not turn back the clock on women and work.  Equality campaigners like the EHRC and Fawcett Society have welcomed the Government’s decision yesterday to reinstate pay gap reporting. 

“It is good news that Fawcett’s call for the Government to reinstate enforcement of gender pay gap reporting has been heeded; and that large employers must report their gender pay gap for 2020-2021,” stated Felicia Willow, Chief Executive of the Fawcett Society. “The UK has a persistent gender pay gap that won’t be closed by inaction. Large employers must continue to scrutinise their gender pay gaps and take action in order that they can be closed. We recognise that the pandemic has affected many employers, but gender pay gap reporting is good for business. We therefore hope that there will be no further delays in enforcement after this year.”

Anna Ritchie Allan, Executive Director of Close the Gap, also welcomed the Government’s decision and believes that companies must take action now to ensure pay gaps aren’t widened any further. “Last year’s suspension of gender pay gap reporting sent a harmful signal to business that in time of economic crisis women’s equality isn’t important. Close the Gap therefore welcomes the reinstatement of reporting for 2021. Women’s employment has been hit harder by Covid-19, with women more affected by furlough, job losses, while also shouldering the bulk of childcare and home schooling,” she pointed out. “It’s critical that businesses take action now to ensure that their pay gap isn’t widened, and the inequalities that women face at work aren’t exacerbated further.”

There’s “clear and mounting evidence that taking action to advance gender equality and diversity makes good business sense”, she added. “Companies that take steps to advance gender equality and diversity at work are more innovative, more productive, better able to manage skills gaps, and better protected from the costly risk of discrimination.”

BUSINESS CONFUSION

Gender pay gap reporting is a UK legal requirement for organisations with over 250 employers since 2017. However, last year the Government suspended it due to the coronavirus pandemic. According to EHRC 6,000 organisations managed to report their data last year while reacting to the effects of Covid-19.

“It is not just the law, but the right thing to do for their staff, demonstrating a commitment to all their female employees, which is why organisations like the CBI have supported our decision to recommence reporting and enforcement,” added Falkner.

However, earlier this month pay gap specialist Spktral, highlighted that gender pay report submissions were down 50% compared to the same point in previous years. It attributed this to businesses being confused over whether they were required to submit their gender pay gap reports this year.

“It’s good that clarification has finally been provided regarding enforcement of the 2020 pay gap report,” commented Spktral’s CEO Anthony Horrigan. “However, it is critical that organisations use their people data to make accurate evidence-based decisions regarding this volatile landscape. Those that have great numbers of furloughed workers should already be examining their insights intelligently; and should know exactly how furlough and potential redundancies affect the representation of men and women throughout their organisations.  A private or third sector organisation who predominantly pays its employees on a monthly basis can carry out the work required to analyse its pay gap from the 1st May every year; the closer to the snapshot it’s analysed, the more time they can spend making changes and implementing action plans to close their gaps.”  

ANALYSIS FOR FAIR REPRESENTATION

However, Horrigan warns companies from leaving analysis until the last minute. “Leaving analysis till the eleventh hour erodes an organisation’s ability to implement changes; and means that this is at best purely reactive and at worst it boils every man and woman down to a string of equations that are rolled out once a year.”

He also disagrees with the line “Gender pay gap reporting is good for business“.  “It’s not. It’s sometimes just another report that goes unchallenged straight onto the coffee table; or maybe onto the website with little thought to the reasons behind the numbers,” he pointed out. “We advocate for accurate, consistent pay gap analysis that can be used to make evidence-based decisions; that drive a fairer representation of every different person across the pay range of an organisation.”