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Will furlough affect your pay gap?

The Government Equalities Office has confirmed how furlough will impact the calculations that are involved in the gender pay gap reporting process.

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In-house professionals can attend the Reward & Payroll Summit as a guest of Reward Strategy
In-house professionals can attend the Reward & Payroll Summit as a guest of Reward Strategy

Pay gaps on a whole will be discussed at the upcoming Reward & Payroll Summit on December 10 and 11.

 

In-house professionals are able to attend to first day of the event, sponsored by by Ceridian, Immedis, Cintra HR & Payroll Services, The Payroll Centre and the CIPP, as a guest of Reward Strategy. Apply for your complimentary pass here.

 

There is yet to be indication of the reporting deadlines for gender pay gap data in 2020/21, despite it being postponed this year due to the pandemic. However, the Government Equalities Office has confirmed how furlough may affect reporting:

 

Employees who were paid less than their standard pay due to being on temporary leave should be considered as relevant, but not as full-pay relevant employees, which means that any furloughed employees must be counted when establishing what the employer headcount is, and included in the gender pay gap calculations, when:

  • Calculating the percentage of men and women receiving bonus pay;
  • Calculating the average (mean) gender pay gap using bonus pay;
  • Calculating the median gender pay gap using bonus pay.

These calculations are made using relevant employees and so should include any employees that were placed on furlough.

 

Furloughed employees that received less than full pay would not count as full-pay relevant employees, due to the fact that they were paid a reduced rate as a result of being on a period of leave. Employees on furlough who received less than full pay must be excluded from gender pay gap calculations when:

  • Calculating the average (mean) gender pay gap using hourly pay;
  • Calculating the median gender pay gap using hourly pay;
  • Calculating the percentage of men and women in each hourly pay quarter.

Furloughed employees receiving less than full pay do not count as full-pay relevant employees, as they were paid a reduced rate due to being on a period of leave. You must exclude employees on furlough who received less than full pay in your gender pay gap calculations when:

  • Calculating the average (mean) gender pay gap using hourly pay;
  • Calculating the median gender pay gap using hourly pay;
  • Calculating the percentage of men and women in each hourly pay quarter.

If employees had their salaries topped up to their normal levels whilst on furlough, then they would also count as full-pay relevant employees for the purposes of calculations. If any employees agreed to defer a portion of their earnings, and were not placed on furlough, they would also be considered as full-pay relevant employees as they were not paid at either a reduced rate or nil as a result of being on leave.

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