Gender pay gap reporting and the implications of furlough

Furlough has the potential to skew an organisation’s gender pay gap significantly. We consider what furlough might mean for organisations preparing their data ahead of the next gender pay gap reporting deadline and the issue is increasingly topical now that an extension of the furlough scheme to the end of March 2021 has been announced.

Blake Morgan Employment law solicitor Madeleine Mould examines the issues in an article first published in Personnel Today on 10 November but the article was updated on 10 February 2021.

As a reminder, the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 which came into force on 6 April 2017 set out details of how employers with 250 or more ’employees’ (defined widely) are to comply with the requirement to publish certain information about gender pay. Employers must report on:

• The difference between the mean hourly rate of pay for male and female ‘full pay’ employees expressed as a percentage
• The difference between the median hourly rate of pay for male and female ‘full pay’ employees expressed as a percentage
• The difference between the mean bonus pay paid to male and female employees over the 12 months ending on the snapshot date, expressed as a percentage
• The difference between the median bonus pay paid to male and female employees over the 12 months ending with the snapshot date, expressed as a percentage
• The proportions of male and female employees who were paid bonus pay over the 12 months ending with the snapshot date

It is still not clear whether Gender Pay Gap reporting will be suspended again for 2020/21, but the Government website pages for it were updated on 14 December 2020, perhaps a clear sign that it is not intended to be suspended this year. Eligible employers should assume for now that it will not be, and ensure that the relevant data is available. A report by the Women and Equalities Committee this week has called for the Government urgently to reinstate Gender Pay Gap reporting, and even include figures for 2019/20.

Setting aside the fact that many employers will not have reported for 2019/20, leaving a gap in the longer-term narrative, one key issue for the 2020/21 reporting year will be the impact of furlough. This is increasingly topical now that the furlough scheme has been extended until the end of April 2021 and there are calls to extend it even further.

When the Government updated its Gender Pay Gap reporting pages on 14 December 2020, it confirmed that furloughed employees should be excluded: “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, family friendly leave, sick leave, special leave, furloughed leave under the Coronavirus Job Retention Scheme, unless their pay was topped up to their usual full pay and any other forms of leave (for example, study leave or sabbaticals)”

If you need legal advice on gender pay gap reporting, or any other matters, speak to a member of our Employment team.

This article is part of the Employment Law Newsletter – Winter 2021