The requirement to report your organisation’s gender pay gap will apply in 2021. There will be a six-month grace period before the Equality and Human Rights Commission (EHRC) starts enforcement action.
Last year, the EHRC and Gender Equalities Office suspended the enforcement of gender pay gap reporting requirements for the reporting year 2019/20 in the face of the COVID-19 pandemic. The EHRC has confirmed that it will take enforcement action this year if employers do not comply with the reporting requirements. However, it will not start to take enforcement action until 5 October 2021. This gives organisations a six-month grace period after the 4 April reporting deadline to submit their data if they are unable to meet the actual deadline. The EHRC may investigate employers who do not report their gender pay gap data. It has the power to take court action, which could ultimately lead to unlimited fines.
There was widespread concern that suspending the reporting requirement again this year would undermine efforts to tackle the gender pay gap. The extension offered by the EHRC seeks to balance the need to continue progress in reducing the gender pay gap against the significant challenges organisations face due to the pandemic.
The data organisations submit this year will be based on the snapshot date of 5 April 2020 for the private sector (30 March 2020 for public sector organisations). For those organisations that have used the Coronavirus Job Retention Scheme, which started to operate less than two weeks before the snapshot date, the Gender Equalities Office has confirmed that the definition of leave should be interpreted as including employees who are on furlough (if they receive less than full pay). This means that employees on furlough will not count as “full-pay relevant employees” for the purposes of calculating the mean and median hourly rates or the proportion of male and female employees in each quartile. Employers must still include furloughed employees in the calculation of the gender bonus gap.
The absence of furloughed employees from the calculations may have a significant impact on the reported data, particularly when compared to previous years. Organisations can, and should, include narrative to explain any changes to their pay gap and what action they plan to take to close it. The Government Equalities Office has published a collection of guidance on gender pay gap reporting, which we blogged about in December. The EHRC is encouraging organisations to submit their data on time where possible.