Charles Cotton, senior policy adviser, performance and reward.
Gender pay gap reporting is an important tool for ensuring that the way we manage, develop and reward people is fair. Employers can boost the impact of reporting by explaining, through a narrative to stakeholders, why the figures are what they are and by setting out in an action plan the steps they plan to take make the workplace fairer. Gender pay gap reporting isn’t simply the icing on the cake of creating a more equal society. It’s an integral part of the cake. Remove it, and our ability as a nation to level up and ‘build back better’ will be restricted.
For that reason, we’re pleased that the Equality and Human Rights Commission (EHRC) has announced that, despite the upheaval of the pandemic, large employers are still required to report their gender pay gap data this year. Enforcement action against employers that fail to report won’t kick in until 5 October this year, but the annual deadline for reporting hasn’t really moved: it’s still 30 March for the public sector and 4 April for the private and voluntary sectors.
The EHRC hoped that by deferring any enforcement action for six months it would give employers the breathing space they need in these difficult times whilst also continuing to enforce these important regulations.
The announcement emphasised that the EHRC: ‘will begin its enforcement after the six-month period, contacting employers that have not submitted their data. The EHRC has the power to investigate employers that fail to report their gender pay gap data which could lead to unlimited fines after court action.’
It also stressed that, as in previous years, employers must submit their Gender Pay Gap data online through Government's Gender Pay Gap reporting website and on their own website.
Because of furlough, it has provided comprehensive guidance on how to include furloughed staff in Gender Pay Gap reporting. This complements the guidance already provided for employers. The pandemic will not only have implications for how employers calculate their gender pay gaps, but also how they communicate their data, narrative and action plans. To help employers with this, we’ll be publishing an update to our existing gender pay gap reporting guidance early next month.
Delayed reporting may send the wrong signal and will slow progress on closing the gender pay gap
We’re pleased that large employers still have to report their gender pay gap data, but the delayed enforcement could send some employers the wrong signal, indicating to them that reporting is simply a box-ticking compliance exercise, rather than an essential activity that can deliver improvements for businesses, employees and society. To overcome this concern, we must keep stressing how important gender pay gap reporting is to improving lives and livelihoods.
We support the EHRC encouragement for employers to submit their data as soon as they are ready. A recent CIPD poll found many employers were well on their way to hitting the March and April deadlines. If they can, we would encourage them to stick to their original plans. The earlier an employer can disclose its figures, then the earlier it can review its progress and begin taking the steps that need to be taken to achieve meaningful change.
As employers will shortly have to start reporting gender pay gap data for the snapshot dates of 31 March or 5 April 2021, it might also make sense for some to report the 2020/21 information as soon as they are able so they don’t end up with having to report two sets of data close to one another. Something that employees may find confusing.
Employers should also consider how stakeholders may react to a delay. For instance, investors may interpret the decision as indicating that the company doesn’t give people issues the priority it should, and this might then influence their investment decisions. Similarly, such a decision to postpone might have negative consequences for an employer’s reputation among its employees and customers, as well as the media.
The pandemic has widened gender inequality across the UK, so employers should be doing more, not less, to tackle it
COVID-19 and the subsequent restrictions on business activities have had a negative impact on pay and employment prospects. There is evidence that women might have been worst affected by recent events. For instance, in her blog post, my colleague Claire McCartney flagged research from the Institute for Fiscal Studies and University College London, which reveals the pandemic’s negative impact on working parents and working mothers especially, with:
She also cited the ONS data on parenting in lockdown, which shows that many parents have had to change their work routines around childcare, and that parents were at significant risk of furlough, and data from a Pregnant Then Screwed survey of almost 20,000 mothers and pregnant women in July 2020, which found that 46% of mothers being made redundant blamed a lack of childcare provision during the health crisis.
Given that the pandemic has widened inequality across the UK, employers should consider additional or enhanced actions that they might need to take to help address this. For example, the Government’s Equality Office and the Behavioural Insights Team have gathered evidence around the practices that work when it comes to progressing gender equality. We would encourage organisations to build on this evidence to introduce and progress ways of supporting greater gender equality at all levels. These include actions such as: including multiple women in shortlists for recruitment and promotions, using structured interviews for recruitment and promotions, and being transparent about pay and promotion processes.
Flexible working also supports inclusion and diversity in the workforce, and the CIPD has recently launched the #FlexFrom1st campaign calling on organisations and the Government to introduce the right to request flexible working from day one of employment to support opportunities for all.
While no one welcomes the hardship that the pandemic has brought to so many people, the silver lining is that it could encourage more organisations to recognise the damaging impact of widening inequalities, and to seriously investigate and address their pay and workforce representation gaps with renewed emphasis. By doing so, we have the opportunity to build back better, with more equal, diverse and inclusive employment practices across the UK.
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