Louisa Withers | 21 Jul 2021

Pay gap reporting continues despite regulatory hiatus

IDR’s latest survey on pay gap reporting shows that the majority of employers continued to publish their gender pay gap figures in 2020, despite the Government’s suspension of the regulations due to COVID19. However, a larger proportion are making use of the extension for reporting the figures in 2021. The survey also shows many employers continuing to press ahead with other pay gap monitoring as part of their commitments on equalities.

Gender pay gaps

For four years now, firms with over 250 staff have been legally required to publish statistics on the gap between men’s and women’s earnings in their workplaces. Coronavirus has had far-reaching effects on HR activities, one of which was the suspension of the gender pay gap reporting requirements in 2020. Announcement of the suspension just two weeks before the 2020 deadline is likely to have meant that many employers had already prepared their statistics and so went ahead and published them as planned. The pandemic’s impact on the UK was only just becoming evident at that point and at the time we also monitored pay rises continuing pretty much as normal. Our latest survey on pay gap reporting shows that just two of 44 firms made use of the 2020 exemption, while 17 of the total are using the 2021 reporting extension to 4 October.

While the pay gap is a fairly crude measure of the difference in men and women’s pay and is by no means a direct indicator of discrimination, the legislation has helped to place (in)equality firmly on the HR agenda, with many organisations viewing tackling inequality as the ‘right thing to do’. The calculations themselves are affected by a range of issues that have very little to do with direct employer discrimination. However knowing about the gap is the first step to understanding it, and also hopefully in devising initiatives to reduce the gap. In fact, our survey shows that 78% of respondents have put measures in place to try and reduce their gender pay gaps and half (53%) have undertaken a full equal pay audit since the regulations came into effect in April 2017. Furthermore, half of the 53% have conducted an equal pay audit annually since 2017. 

Ethnicity pay gaps

In line with the notable proportion of the sample conducting equal pay audits, the survey also shows that many have opted to publish their ethnicity pay gaps despite there being no specific regulations requiring firms to do so. Following the public consultation that ended in early 2019, the Government may introduce legislation requiring the reporting of ethnicity pay gaps. In anticipation of this, many organisations have begun to calculate and publish their ethnicity pay gaps as a first step in highlighting potential issues and taking relevant actions to reduce inequalities among staff. Furthermore, the global Black Lives Matter movement has pushed the issue of ethnicity/race pay gaps – not to mention broader issues of equality, diversity and inclusion – higher up the HR agenda.

Some employers told us they faced difficulties calculating ethnicity pay gaps due to small numbers of non-white staff. This is connected to the fact that local labour markets and therefore workforces around the UK vary in terms of their respective proportions of ethnic minority and white British workers. This can be an issue when it comes to assessing ethnicity pay gaps but is not necessarily an insurmountable one as long as due care is paid to the statistical reliability of estimated gaps for each group, and attention paid to the potential reasons for any gaps that might arise. Another issue reported by respondents was that some staff choose not to voluntarily provide personal information. However, in order to obtain better data some firms have undertaken specific work in this area – such as data gathering campaigns aimed at ensuring more colleagues supply information regarding protected characteristics, thereby helping to provide a more accurate reflection of the workforce profile and a basis for assessing ethnicity pay gaps.