Due to the impact of Coronavirus, the Equality and Human Rights Commission has announced that employers now have until 5 October 2021 to report their gender pay gap information for the 2020/2021 reporting year (which uses a snapshot date of 31 March 2020 and 6 April 2020). When they do report for the 2020/2021 reporting year, employers will need to exclude the pay of employees who were absent for certain reasons relating to the COVID-19 pandemic and so may wish to accompany their gender pay gap report with a narrative, explaining the impact of the pandemic on the figures reported.
Employers with 250 or more employees are required to publish annual information relating to pay, including any differences in average hourly pay between relevant male and female employees. For private sector employers, the required data relates to the “snapshot date” of 5 April and must usually be reported within 12 months (i.e. by 4 April of the following year).
In March 2020, in recognition of the impact of the coronavirus pandemic, the Government Equalities Office and the Equality and Human Rights Commission took the unprecedented step of suspending enforcement of the gender pay gap deadlines for the 2019/2020 reporting year. They have now postponed the deadline for the 2020/2021 reporting year to 5 October 2021
Employers are not required to include in their calculations the pay of any employee who, on the snapshot date, was being paid at a reduced rate, or not at all, as a result of the employee being on certain types of leave, including sick leave and parental leave. The Government Equalities Office has confirmed that the pay of employees who were receiving reduced pay on 5 April 2020 as a result of being furloughed should also be omitted from their employer’s pay gap reporting. However, employers should still include the pay of any employee whose furlough pay was topped up to their normal pay rate.
The result will be that, for many employers, a substantially larger proportion of their workforce will be excluded from this year’s gender pay gap reporting than in previous years. Employers will need to exclude the pay of any employee who was furloughed on 5 April 2020 on reduced pay. They will also need to exclude the pay of any employees who were absent on that date and receiving statutory sick pay, having contracted COVID-19 or because they were self-isolating and unable to work. Likewise, employers will need to exclude the pay of any working parents who were taking unpaid parental leave on that date in order to care for their children, following the closure of schools and childcare providers for most children.
Employers will, however, be required to include the pay of any employee who, on 5 April 2020, was working on reduced pay. An employee may have been receiving less pay on that date for a number of COVID-related reasons, including having requested reduced hours for childcare reasons or to care for other dependants, or because the employer had reduced the employee’s salary and/or working hours for business reasons.
Due to the narrow window for analysis being a single day, 5 April 2020, and the exceptional circumstances that existed at that time as a result of the COVID-19 pandemic, this year’s gender pay gap reporting may be misleading and may give the false impression of an employer’s current gender pay gap. In view of this, to give proper meaning to their reporting, employers may want to address any exceptional circumstances in a voluntary narrative accompanying their report.
Lloyd Davey
Sarah Taylor