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Suspending gender pay gap reporting obligations a ‘mistake’, say experts

The coronavirus outbreak is likely to disproportionately affect women, experts have warned, following the announcement that businesses will not be required to submit gender pay gap data this year.

Yesterday, the Government Equalities Office said it would not be taking action against employers that fail to submit their pay gap data, effectively suspending the reporting requirement for the year.

The move has been widely welcomed as a reprieve for HR departments currently tasked with keeping employees and their businesses safe during the outbreak. But experts have called on organisations that can to still submit their data – not least to provide a benchmark to help measure the impact of the coronavirus outbreak on gender pay when this year’s snapshot is published in 2021.

Gender pay reporting requirements suspended this year

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Nishi Mayor, business director at Business in the Community, said that while employee safety and business survival should take priority, it was important employers didn’t completely lose sight of their gender pay goals.

She noted that women were likely to be “in the eye of the storm” during the current coronavirus outbreak. Women were more likely to pick up extra caring responsibilities as schools shut or when relatives fall ill, make up the majority of employees in the service sector – which has been hit hardest by the virus – and were more likely to be in lower-paid or less secure jobs, putting them most at risk of losing their jobs, Mayor said. 

“All this means this crisis could lead to a widening of the pay gap – making reporting this year especially important,” she said.

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This was echoed by Sam Smethers, chief executive of the Fawcett Society. “It will be mothers who will take on the majority of care for the children who are not in nursery or school. Women are also the majority of healthcare workers on the frontline and it is overwhelmingly women who will be at risk from an abusive partner if they are having to self-isolate at home,” she said.

Charles Cotton, senior reward and performance adviser at the CIPD, said there were a number of ways that the coronavirus outbreak could affect the results of next year’s gender pay gap reporting. He said job losses could mean the number of organisations meeting the reporting threshold of 250 employees could fall.

Gender pay gap calculations are based on full pay relevant employees – meaning staff on full pay during the reporting period. Voluntary pay cuts or an increase in the number of people taking unpaid leave could therefore exclude many from being included in the statistics. Similarly, those who received full pay while on sick pay are included, but those on reduced or statutory sick pay would not be.

“If some high earners are excluded because they’re not on full pay, then the gap could narrow because you’ve got fewer higher payers and they tend to be men,” said Cotton. Similarly, if lower-paid workers – who tend to be women – are excluded because they are not on full pay then the gap could narrow. And if bonuses, which are often more generously awarded to men, are lower this could also artificially narrow the gap.

“Ideally you’d prefer to see the gap narrow over time for the right reasons,” said Cotton. “If you have a lot of low-paid women taken out of the statistics [through job losses] then the average pay for women will go up and the gap will be narrowed, but that’s not down to a more gender-balanced workforce or advances in placing women in higher-paid roles.”

Frank Douglas, CEO of Caerus Executive, called the decision to suspend reporting requirements “a mistake”. “Eliminating inequality in the workplace is a business-critical issue in organisations and for the government to push the pause button sends an unneeded message [that] closing the gender pay gap is a non-essential or optional business activity,” he said.

Douglas added that most organisations now will have already prepared their data, meaning reporting should not be a major burden. “With the government action it now provides a convenient excuse to not provide transparency on inequality in the workplace,” he said. “To now relax reporting on those who are waiting to the last minute is also to further discourage early reporting going forward.”

Despite the pressures that coronavirus is putting on employers, wellbeing and inclusion have to remain priorities “just in a different guise”, said Jill Miller, senior diversity and inclusion adviser at the CIPD. 

Miller noted that, before the outbreak, people professionals were not only preparing for the gender pay gap reporting deadline, but also the potential introduction of ethnicity and disability pay gap reporting. “Inclusion is still very important; the focus on those will be picked up again when we’re through the immediate crisis, but in the meantime wellbeing and inclusion still need to be core priorities.”

It is important employers think about how they can look after wellbeing but keep people feeling part of an organisation or a team while considering the diversity of ne, Miller added. Flexible working for parents is one aspect of this – including allowing parents to work different hours – but employers also needed to think about how they communicate with employees, she said. 

“Many companies are defaulting to video calling and for many people that works really well, but for others it might be an environment where they don’t feel very comfortable,” said Miller. “Managers really need to understand their people and their preferences.”