Gender Pay Reporting and the next steps to be taking in 2023

Gender Pay Reporting 2023

Gender Pay Reporting (GPR) came into force on 6 April 2017 and requires employers based in the UK, with 250 or more employees, to publicly report a range of gender pay information each year.

The employer has a ‘snapshot date’ on which their calculations are based. The snapshot date is 31 March for public authorities or 5 April for all other employers. The calculations must be reported and published by the following 4 April. It is a legal requirement for all relevant employers to publish a written statement as well as submit the results to the Government’s Gender Pay Gap website. While there are currently no financial penalties for employers for failing to perform their GPR, we are seeing greater media scrutiny towards employers that fail to comply with the reporting regulations.
 

What employers need to report

Under GPR, employers are required to publish the following six statistics:

1. Mean Gender Pay Gap
2. Median Gender Pay Gap
3. Mean Bonus Gender Pay Gap
4. Percentage of women and men who were in receipt of bonus pay
5. Percentage of women and men in each pay quartile of hourly pay

In addition to the statistics, the employer is required to publish a written statement to confirm that the information published in the GPR is accurate: this must be signed by an “appropriate person” in the organisation. Who qualifies as the “appropriate person” will depend on the organisation reporting, however it would typically be a director for a corporate body or senior officer/governing body member for unincorporated bodies.
 

2023 reporting

2023 is likely to be an unpredictable year for GPR. One of the consequences of the UK’s Coronavirus Job Retention Schemes, was that any individuals furloughed as at the snapshot date that were in receipt of less than full pay had to be excluded from an organisation’s GPR analysis. Predictably, as the 2022 reports captured a snapshot date of 5 April 2021, this impacted the GPR statistics of a large number of organisations. While some organisations affected made public statements of the impact furloughed employees had on their Gender Pay Gap (GPG), other organisations that benefited from the exception were able to promote the positive strides the organisation had taken to reduce their pay gap.

2023 will return all organisations to a level playing field, and it will be interesting to see how organisations have refocused their efforts to address their GPG considering the mass disruption felt by employers because of the pandemic.

In recent years, we have also seen a real push by organisations to implement an Environmental Social and Governance (ESG) framework so that stakeholders can better understand how an organisation is managing risks and opportunities in these areas. GPR enables organisations to positively demonstrate their ‘social’ contribution to fairness in society, by evidencing the fair and equal pay opportunities it provides to its employees. Therefore, as ESG becomes an increasing priority for organisations, we fully expect that greater focus will be applied to an organisation’s GPG strategy.
 

Ethnicity pay

The moral case of fair pay has rightly brought the Ethnicity Pay Gap under the spotlight. The House of Common’s Women and Equalities committee recommended to the Government that mandatory Ethnicity Pay Gap reporting be introduced by April 2023 for all organisations that currently perform GPR. However, for now at least, the Government has elected not to make Ethnicity Pay Gap reporting mandatory.

Nonetheless, despite the absence of mandatory reporting, we are seeing more and more organisations electing to voluntarily disclose their Ethnicity Pay Gap. Given the ever-increasing media scrutiny of organisations, employers are using the time before the reporting becomes mandatory, in order to fully understand their Ethnicity Pay Gap and develop strategies in order to address where such inequalities exist in their workforce.