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Gender and ethnicity pay gap reporting 2021 and beyond

With the 5 October 2021 deadline for reporting 2020 gender pay gaps now passed, the impact which the pandemic has had on progress to reduce gender pay gaps can clearly be seen.

The effect of furlough and childcare on women over the past 18 months coupled with the financial strain many organisations have been under has resulted in, at best, no change in gender pay gaps and, at worst, an increasing gap between the average pay of men and women. So where does that leave organisations in terms of bringing the gender pay gap back up the agenda? And what other mandatory reporting obligations could be coming?

Our panel discussion with Shoosmiths’ own Emma Morgan, Partner, alongside Trish West, Head of Reward at ATS Euromaster Limited, Simon Langley, Head of Diversity & Inclusion at CDC Group plc and Paul Brown of Leicester YMCA, focused on these issues and the practical steps employers can take. Key points discussed included:

Gender pay gap reporting

  • With 1 in 10 employers not having complied with the reporting regulations this year, there are clearly shortfalls in the current gender pay gap reporting regime, not least because the requirements are to report the headline figures only with any narrative or explanation of those figures being voluntary.
  • This years’ figures show an increase in the median pay gap figure to 10.4% but a virtually unchanged mean figure at 13.3%. However, the exclusion of employees on furlough has skewed the figures so how realistic a picture this years’ reports present is questionable.
  • While there is no quick fix to the problem, practical steps can be taken to reduce the gender pay gap over time, from reviewing job descriptions, changing bonus structures and enhancing parental leave as well as introducing reverse mentoring schemes.

Ethnicity pay gap reporting

  • This is still very much a voluntary process with only 13 of the 100 largest UK listed employers revealing their ethnicity pay gaps.
  • Whilst it is likely that mandatory reporting is coming, there are still many obstacles to overcome, whether in terms of collection of data or deciding what categories to report against.
  • Internal networks are likely to play a key part in assisting with this process.

Going beyond gender and ethnicity pay gap reporting

  • What other types of reporting might be coming down the line? Certainly there is an increasing focus on the impact of socio-economic background, disability and age on career progression. Employers will need to watch this space.

Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2022.

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