UK Gov't Suspends Gender Pay-Gap Rules Amid Pandemic

Law360, London (March 24, 2020, 12:19 PM GMT) -- Employers in the U.K will escape enforcement if they fail to report gender pay-gap figures, the government announced Tuesday, citing the impact on business of the coronavirus pandemic.

The Government Equalities Office and the Equality and Human Rights Commission, a public body, said they will suspend enforcement action for companies that fail to report on the gap between what they pay their male and female employees before the looming deadline.

The cut-off date for public sector bodies to reporting their pay-gap data was due to be March 30, with private companies expected to file by April 4. More than 3,000 companies have already reported their data this year – which is only a quarter, 26%, of employers expected to disclose their pay details.

“We recognize that employers across the country are facing unprecedented uncertainty and pressure at this time,” Liz Truss, minister for women and equalities, and EHRC chairman David Isaac said in a joint statement. “Because of this we feel it is only right to suspend enforcement of gender pay gap reporting this year.”

The Equality and Human Rights Commission is responsible for enforcing the reporting requirements. It publicly names organizations that fail to report their gender pay gaps and investigates failure to comply. It also has the power to take companies to court to seek unlimited fines, but has yet to use these powers.

The decision comes after Prime Minister Boris Johnson ordered the shuttering on Monday of all businesses selling non-essential goods in a move to slow the spread of coronavirus. A string of high-street stores and restaurant chains had also announced they were closing their doors.

Gender pay gap reporting rules were brought in under the Equality Act in 201, obliging companies with 250 or more employees to report the difference between the average earnings of men and women, expressed relative to men’s earnings.

Some companies, including financial services companies and law firms, have been criticized for “circumventing the spirit of the legislation” by splitting their figures through subsidiaries and separate company divisions, skewing figures.

Employers must report their data to the government online and make it publicly available in a written statement on their websites.

Tuesday’s decision comes after the Financial Conduct Authority asked U.K. companies to delay publishing their preliminary financial statements for at least two weeks so they can properly review how the fallout from the coronavirus is affecting profits.

The FCA also said it was in talks with the Financial Reporting Council and the Bank of England’s regulatory arm about possible measures aimed at ensuring companies take the necessary time “in these uncertain times to prepare appropriate disclosures and address current practical challenges” that come with the spread of COVID-19.

--Editing by Ed Harris.

For a reprint of this article, please contact reprints@law360.com.

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