Gender Pay Gap Reporting Guide 2021

‘Gender pay hole’ refers back to the distinction between the typical earnings of women and men throughout an organisation.

The Gender Pay Hole Reporting Laws have been launched in 2017 to make it a authorized obligation for employers to take motion to establish and publish any gender pay gaps inside their organisation.

Below the rules, organisations with 250 staff or extra should, on a given ‘snapshot’ date, report yearly on their gender pay hole utilizing six differing measures.

Along with offering figures, some employers additionally must submit a written assertion, whereas all are inspired to additionally present a ‘supporting narrative’ to offer context to the numbers.

Collectively, this info needs to be utilized by employers to enhance and slim any recognized gender pay hole inside their organisation.

It’s a authorized requirement for all related employers to publish their gender pay hole info. Failure to satisfy the necessities may end up in enforcement motion and reputational harm.

On this information, we clarify which employers are required to submit a gender pay hole report, what the necessities and deadlines are for reporting.

Non permanent suspension because of Coronavirus 

In response to ongoing pandemic points, the deadline for the 20/21 reporting yr has been postponed till 5 October 2021. Employers are being inspired to proceed to satisfy the usual deadline the place doable, ie 30 March 2021 and 4 April 2021, however the Equality and Human Rights Fee (EHRC) has confirmed that enforcement motion is not going to be taken in opposition to employers, so long as they by 5 October 2021.

Though it needs to be talked about that no enforcement motion has been taken in opposition to any employer who didn’t report or reported late for the reporting yr 2019/20 (snapshot date of both thirty first March 2019, or fifth April 2019) in recognition of the uncertainty and strain ensuing from the Coronavirus pandemic. The federal government has confirmed that reporting will resume in 2021 in the identical method as earlier than.

The snapshot date for personal sector employers is fifth April 2020, which got here simply after the primary nationwide lockdown and the rollout of the Job Retention Scheme. Regular guidelines dictate that staff don’t have to be included inside the ‘reporting pool’ in the event that they weren’t on full pay on the snapshot date. In follow, this implies any worker on furlough, and who didn’t have their pay topped as much as 100%, will be discounted for the needs of the report.

One other key challenge to recollect is that employers might have decreased their staffing numbers throughout 2020 and imagine they’re now not required to provide a report as a result of staffing ranges have decreased beneath 250. The overall rule is that if an employer happy the standards on the important thing date of fifth April 2020, then they need to produce a report.

Which employers are topic to gender pay hole reporting?

It’s a authorized requirement for all corporations with 250 staff or extra to report and publish their gender pay hole info. There are two units of rules, one relevant to most public authorities and the opposite for personal, voluntary and all different public authority employers.

Six Measures of the Gender Pay Hole

The necessities on employers comprise six completely different ‘measures’ of pay gaps that should be reported:

• Imply gender pay hole – That is the distinction between the imply hourly price of related male full-pay staff to that of their related feminine counterparts
• Median gender pay hole – The distinction between the median hourly price of related male full-pay staff to that of their related feminine counterparts
• Imply bonus hole – The distinction between the imply bonus paid to related male staff to their feminine counterparts
• Median bonus hole – The distinction between the median bonus paid to related male staff to their feminine counterparts
• Bonus proportions – The proportion of female and male related staff who obtained bonus pay through the related interval
• Quartile pay bands – The proportion of female and male full-pay related staff within the decrease, decrease center, higher center, and higher quartile pay bands.

Every measure supplies a barely completely different view on the gender pay hole and turns into more and more significant if learn together with the opposite measures and inside the context of the general HR and payroll insurance policies, together with coaching, growth, recruitment, or choice. Earlier than calculating gender pay hole figures, particular payroll information for every related worker will have to be gathered. That is finished by figuring out related staff and full-pay related staff from a headcount and utilizing this information to make gender pay hole calculations.

What’s the related ‘snapshot date’?

There are two deadlines which every have their very own ‘snapshot’ date.

Most public authority employers should use a snapshot date of thirty first March, publishing their gender pay hole report by thirtieth March of the next yr.

Non-public, voluntary, and all different public our bodies should use a snapshot date of fifth April. They need to publish their gender pay hole report by 4th April of the next yr. These employers should additionally present a written assertion confirmed by an appropriately senior particular person, similar to a Chief Govt. Such people depend upon the kind of employer concerned: a company physique (aside from a restricted legal responsibility partnership (LLP)) will want a director, an LLP would require a delegated member, a restricted partnership will want a basic companion, another sort of partnership would require a companion, for an unincorporated physique of individuals (aside from a partnership), it is going to be a member of the governing physique or senior officer, and for another sort of physique, it is going to be probably the most senior worker.

Written assertion

The written assertion, or supporting narrative, ought to clarify the explanations for the outcomes and supply particulars about motion being taken to scale back or eradicate the gender pay hole.

Public authority employers should not required to submit a written assertion except they’re not listed in Schedule 19 to the Equality Act 2010.

The written assertion can embrace:

• An reason why the outcomes present ‘challenges’, similar to why executives obtain the very best bonuses and most of them are males. If a problem has been recognized, an employer ought to think about taking new or implementing faster or extra actions to scale back or eradicate their gender pay hole.
• Element why the outcomes present ‘successes.’ For instance, if a latest change to a bonus coverage has helped decrease the gender pay hole.
• Spotlight ‘plans for long-term outcomes’, e.g., tackling the underrepresentation of ladies in a particular business or sector similar to science, engineering, or expertise, by operating a recruitment marketing campaign for junior roles. Within the quick time period, this might have the impact of widening the gender pay hole as a result of extra ladies can be at beginning salaries, however within the longer-term will steadiness out as extra ladies rise via the ranks.

Supporting narrative 

Whereas not a compulsory requirement, employers are inspired to publish a supporting narrative to clarify the figures inside the report.
The place a gender pay hole does exist, in lots of circumstances it could neither be discriminatory nor inappropriate. The supporting narrative helps folks studying the gender pay hole report perceive why a gender pay hole is current and what the employer is doing, and has already finished, to handle and shut it.

A supporting narrative also can spotlight to staff and others studying the report, a dedication to closing the hole.
Supporting narratives might embrace:

• Explanations for every gender pay hole determine inside the report
• Rationalization of the distinction between unequal pay and the gender pay hole that contextualises and clarifies the outcomes
• Offering workforce statistics that give a wider and clearer image of the explanations for the existence of the pay hole
• Detailed evaluation of the pay hole
• Can draw comparisons between earlier years’ figures
• Describe how staff and their representatives are being concerned within the course of
• Efforts which were taken to grasp and handle the gender pay hole

Employer motion plan

An motion plan explains how an organization intends to deal with its gender pay hole; it will possibly both be printed as an addendum to your supporting narrative or as a part of the principle report. The plan ought to title clear, particular, and achievable targets that the corporate is dedicated to inside a selected timeframe.

Advantages of publishing an motion plan with targets and clear actions embrace:

• It sends a strong message concerning the firm’s dedication to gender equality within the office
• It attracts a larger pool of potential recruits
• The corporate will develop a repute for being a good and progressive employer
• It creates enhanced productiveness by making certain the workforce feels valued and engaged in an organization with a tradition dedicated to tackling inequality

It might appear apparent, however nonetheless it needs to be talked about, that earlier than tackling gender pay hole, a analysis must be made as to the explanations driving it. This permits growth of a significant and sturdy motion plan that can have an actual impression upon a gender pay hole. Proof reveals that, even in corporations inside the similar sector, the causes can differ and issues similar to gender variations in recruitment and beginning salaries, efficiency scores and promotion (similar to getting ‘caught’ at completely different ranges), or different elements like bonus funds or help of parental depart or part-time work and its impact on profession development.

The Authorities Equalities Workplace has printed finest follow steerage on understanding the gender pay hole on the gov.uk web site, which incorporates actions employers can take or issues they’ll embrace of their plans to scale back it.

Tips on how to publish the gender pay hole report

The gender pay hole reporting calculations, along with any supporting written narrative, should be printed on each the employer’s web site and the federal government web site utilizing the Gender Pay Hole Service. It should be printed inside a yr of the snapshot date and all info stored for a interval of three years from the date of publication.

For any corporations that should not have an internet site the place they’ll prominently publish the report, they need to publish their findings on any firm intranet and/or father or mother firm web site making certain this info is delivered to the eye of its staff.

Penalties for failing to report

Failing to report on time or report precisely will put an employer in breach of the rules and locations them susceptible to enforcement motion from the EHRC, which might result in courtroom orders and fines.

An employer additionally exposes their organisation to reputational danger and hurt to the employer model, since failure to report can elevate suspicions of pay hole points.

The EHRC publishes the names of organisations who didn’t report and particulars of the investigation or enforcement motion taken in opposition to them.

Gender pay hole service additionally applies publicly seen ‘late badges’ to these employers registered with the service who’ve didn’t report and publish their gender pay hole info.

Advantages of early reporting

The advantages of reporting as quickly as doable after the snapshot date embrace:

• Being recognized as a pacesetter inside your area which can have a constructive impression on recruitment, contract awards, and retention
• The info you might want to calculate your gender pay hole could also be extra simply accessed
• Enhance your capability to handle key staff wanted to arrange your submission
• If there are any surprising points or issues, they are often tackled earlier on
• Early evaluation of your gender pay hole report might imply you may establish, and deal with pay gaps prior to in any other case

This helps anybody studying the gender pay hole report perceive why a gender pay hole is current and what the employer is doing, and has already finished, to handle and shut it. A supporting narrative also can spotlight to staff and others studying the report, a dedication to closing the hole.

Want help?

DavidsonMorris’ specialist HR consultants ship complete recommendation on all features of workforce administration together with assembly authorized necessities in relation to gender pay hole reporting. Working carefully with our employment regulation colleagues, we offer a holistic answer for employers to assist nurture constructive working relations whereas remaining compliant along with your authorized obligations. For assist and recommendation with a particular HR or personnel challenge, converse to our consultants.

Gender Pay Hole Reporting FAQs

Final up to date: 27 February 2021