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Gender pay gap enforcement delayed for an additional six months

Gender pay gap enforcement delayed for six months

Enforcement of the Gender Pay Gap Reporting Regulations will not resume until October.

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Partner, KPMG Law

KPMG in the UK

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Due to the continued effects of the COVID-19 pandemic, the Equality and Human Rights Commission has announced that enforcement action against organisations that fail to report their gender pay gap will start again on 5 October 2021, after it was suspended last March.

The Equality and Human Rights Commission (EHRC) has confirmed that it will leave a period of six months before beginning enforcement proceedings against employers who fail to publish their gender pay gap by 4 April 2021

Gender pay gap reporting update

The Equality and Human Rights Commission (EHRC) has confirmed that it will leave a period of six months before beginning enforcement proceedings against employers who fail to publish their gender pay gap by 4 April 2021. The EHRC have confirmed that enforcement will start again on 5 October 2021, after it was suspended last March.

In effect, the change means that employers have another six months to report their data for the 2020/21 reporting year before legal action begins.

The impact of COVID-19

The delay to enforcement is due to the continued effects of the COVID-19 pandemic on business. However, Baroness Kishwer Falkner, EHRC chair, has stated that “Employers should still report their gender pay gap data for 2020/21 on time if they can”. 

Moreover, the EHRC chair states that “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”.

This follows the recent publication of the Women and Equalities Committee report which found that gender inequality has been exacerbated by the COVID-19 pandemic.

One of the key recommendations in the Women and Equalities Committee report to tackle workplace gender inequality was for the government to reinstate enforced reporting for the financial years 2019/20 and 2020/21 and for the Government to publish proposals for introducing ethnicity and disability pay gap reporting within the next six months.

The importance of mandatory pay gap reporting has also been reinforced by an increased focus on global racial inequality over the last year in light of the Black Lives Matter movement. A petition to the UK Parliament calling for mandatory ethnicity pay gap reporting for UK firms with 250 or more staff obtained enough signatures to mean that it ought to be debated in Parliament. The government had said it would respond by the end of 2020 in light of the consultation it ran between 2018 and 2019 but an update has not been forthcoming. In a leaked report obtained by the BBC in December from the government’s 2018 pay gap reporting consultation exercise, three quarters of employers (of 321 responders) wanted large firms to be forced to release ethnicity pay gap data. 

Points employers should consider and how KPMG can help

Given the current inclusion, diversity & social equality landscape, many employers will be reluctant to avoid or delay reporting their gender pay gap. In fact, in light of the support communicated by many high profile organisations following the Black Lives Matter movement,  we may see more employers take it upon themselves to calculate and even publicly report their ethnicity pay gap without waiting for further engagement from the government.

Businesses and employers should consider the impact they can have not only with the workforce but with wider society by voluntarily publishing both their gender pay gap data and ethnicity and disability pay gap data. This is clearly an area of rapid developments and increased scrutiny for both employers and the government.

KPMG can assist your business in its gender, ethnicity and disability pay gap reporting along with workforce management and advising on communication strategy with both stakeholders and affected employees. KPMG has developed a pay gap reporting tool. This technology allows our clients to not only undertake required pay reporting calculations but also undertake enhanced analysis. For more information on KPMG's GPG analytics technology, visit our dedicated pay gap reporting page and download our fact card - KPMG’s pay gap analytics technology.

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