Gender Pay Gap Reporting – what do you need to do in 2021?

Gender Pay Gap Reporting was introduced in April 2017 for those companies with a headcount of 250 or more at their “snapshot date”, however in March 2020 due to the Coronavirus outbreak, the Government Equalities Office (GEO) and the Equality and Human Rights Commission (EHRC) made the decision to suspend enforcement of the gender pay gap deadlines for the reporting year 2019/20.

The majority of employers would have already gathered the relevant data by the time the announcement was made, with many having already reported. To date 5,896 employers have published their gender pay gap data for the 2019/20 year on the government website, compared to 10,840 the previous year.

In its analysis published on 3 November 2020, the Office for National Statistics reported that the gender pay gap among all employees was 15.5% in 2020, down from 17.4% in 2019. The analysis was based on pay as at April 2020 so the impact of the pandemic and furlough is not yet reflected in the figures.

So what do you need to do in 2021?

The government’s furlough scheme take up was widespread and covered up to 80% of pay capped at £2500 per month then decreased to 70%, then 60% and increased back to 80% at the end of 2020. In addition, many employees who were unwell or self-isolating may have been on reduced company sick pay or statutory sick pay. Therefore this reporting year (2020/21) is what employers are most concerned about as they will be required to analyse and publish data from April 2020 at a time when possibly a significant number of their employees were on reduced pay.

When gathering gender pay gap information you need to gather information for each relevant employee at the snapshot date as this is the basis for your gender pay gap calculations, apart from your bonus pay gap calculations.

The GEO has confirmed you must not count any employee as a full-pay relevant employee if they are paid less than their usual basic pay because of being on leave during the pay period which falls within the snapshot date.

Exclude from your list of full-pay relevant employees, those on ‘leave’, and who are receiving less than full pay, including those on:

• Annual leave
• Maternity, paternity, adoption, parental or shared parental leave
• Sick leave
• Special leave
• Furloughed leave under the Coronavirus Job Retention Scheme, unless their pay was topped up to their usual full pay
• Any other forms of leave (for example, study leave or sabbaticals)

If employees had their salaries topped up to their normal levels whilst on furlough, then they would count as full-pay relevant employees for the purposes of calculations.

As ever, the accompanying narrative will be key. Employers should explain the approach they have taken, the impact of any anomalies on the data and, most importantly, outline their action plan for reducing the gender pay gap going forward.

Getting Ahead

Where companies are currently reporting and even if your company does not have 250+ staff, AAB are able to support companies with a fully interactive Gender Pay Gap Dashboard reporting tool which is fed directly from the payroll data supplied by AAB, which allows a real time view of key metrics. The dashboards do all the ‘data crunching’ allowing companies to focus on the output.

The power of this becomes clear as you are able to analyse this data on a real time basis at the click of a button to see your Gender Pay Gap broken down by Department, Job Grade or any other reportable basis across a full history of your payroll.

If you require any assistance with Gender Pay Gap Reporting or outsourcing your payroll, please contact Nicola Burns or your usual AAB contact.

To find out more about AAB’s Payroll team, click here