Experts lament ‘unnecessary delay’ as gender pay reporting extended by six months

Businesses that fail to provide data will not be penalised until October, EHRC says, but commentators warn against firms taking their ‘foot off the pedal’

Employers will be expected to report gender pay gap data this year, the equalities watchdog has said, but will have an extra six months to submit their figures to help them cope with the effects of the coronavirus pandemic.

The Equality and Human Rights Commission (EHRC) has said it will require businesses to submit gender pay gap data for 2020-21, but that it won’t carry out any enforcement on companies that fail to report their data until 5 October, in effect giving firms a six-month extension on the 4 April deadline.

Last year the EHRC took the decision to suspend all enforcement action on reporting in light of the Covid outbreak. However, Kishwer Falkner, chair of the EHRC, said action to reduce the gender pay gap needed to continue.

“Starting our legal process in October strikes the right balance between supporting businesses and enforcing these important regulations,” she said, adding that employers should still report their data for 2020-21 on time if they can, alongside detailed action plans to reduce the long-term gaps in pay.

“Reporting provides an opportunity for employers to demonstrate their commitment to gender equality, which will be more important than ever as the effects of the pandemic continue,” said Falkner.

Claire McCartney, senior resourcing and inclusion adviser at the CIPD, welcomed the news that reporting requirements would be reintroduced this year, but raised concerns that delayed enforcement could send the wrong signal to businesses.

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“Economically, women have been adversely and disproportionately affected by the pandemic. Now is not the time for employers to take their foot off the pedal when it comes to their commitment to closing the gender pay gap,” she said, adding that anecdotally many of the CIPD’s members were confident about meeting the April reporting deadline.

This year more than ever it was also important for employers to publish an accompanying narrative and action plan alongside their data, said McCartney: “The pandemic will have had an impact on their figures. They will need to understand and explain this, and set out how they plan to improve gender equality and tackle pay gaps where they exist.”

Duncan Brown, principal associate at the Institute for Employment Studies, said extending the reporting deadline was a better option than suspending the requirement altogether for another year. Just half of employers that met the reporting requirements last year voluntarily submitted their gender pay gap data, he said.

“Financial reporting was allowed a similar extension last year to recognise Covid-related disruption, but companies still had to report their financial results, and they should have had to report their gender pay gaps, too,” Brown said.

“This sent all the wrong messages – that gender issues are just for the good times and not a priority in more difficult economic conditions.” 

Supriya Garikipati, associate professor in development economics at the University of Liverpool, said businesses have already had enough time to adapt to the changes brought by the pandemic. “We know the significant impact of the gender pay gap on the productivity, morale and mental health of employees. These are likely to be heightened during the pandemic when jobs and pay have been under unprecedented threat in modern times,” she said.

Frances O’Grady, general secretary of the TUC, also said there was no need to delay the reporting requirement for six months. “Women have lost out on pay and had to cut their hours in the pandemic. It’s vital that employers analyse their pay gaps and take immediate action to close them. Unnecessary delay risks turning the clock back,” she said.

Putting off reporting also wasn’t beneficial to employers in the long run, said Helen Burgess, partner at Shoosmiths. “The importance an employer places on these elements, together with the action it is taking to reduce any gender pay gap, are likely to be things that employees consider when deciding where to work and whether to stay with an employer,” she said.