The Equality and Human Rights Commission has launched a consultation into draft regulations for the enforcement process that will be taken against employers who do not comply with gender pay gap reporting requirements.
The consultation, which is running between 19 December 2017 and 2 February 2018, is seeking to gather feedback from employers, representative bodies and other interested parties on The Equality and Human Rights Commission’s draft policy on how it plans to enforce the government’s gender pay gap reporting regulations under its Equality Act 2006 powers.
The gender pay gap reporting regulations require organisations with 250 or more employees to publish the difference between both the mean and median hourly rate of pay for male and female full-time employees; the difference between both the mean bonus pay and median bonus pay for male and female employees; the proportions of male and female employees who were awarded bonus pay; and the proportions of male and female full-time employees in the lower, lower middle, upper middle and upper quartile pay bands.
Private and voluntary sector organisations must report their required pay gap information by the snapshot date of 4 April each year, and public sector organisations must publish their pay gap figures by 30 March.
The Commission proposes to initially seek an informal resolution with employers who have failed to publish their gender pay gap data by the specified reporting date. This action will involve reminding employers of their obligations, and requiring them to comply retrospectively with gender pay gap reporting regulations for the past reporting year within 42 days of receiving the Commission’s letter, as well as comply in a timely fashion to the current year’s reporting requirements. Employers must respond to this notice within 14 days. If employers comply at this stage, then no further action is taken.
If employers still fail to comply, the Commission will notify the organisation that it will undertake investigatory action. During the course of this stage, employers can enter into a written agreement to comply with the gender pay gap requirements to mitigate an investigation.
However, if an employer does not accept the offer of a written agreement, and the Commission’s investigation confirms that the gender pay gap reporting regulations have been breached, then an unlawful act notice will be issued. This will require the employer to prepare a draft action plan outlining how they plan to remedy the compliance breach and prevent further non-compliance. The employer must comply with the action plan once it has received the approval of the Commission.
If employers fail to comply with orders made against them during this process, they will be liable to receive a level five fine, which means there is no maximum limit on the amount they could be fined.
The enforcement action process will apply to private, voluntary and public sector organisations in England, although final stage enforcement action varies for public sector organisations, which are not subject to level five fines.
Ruth Christy, employment specialist at Blake Morgan, said: "Lawyers are waiting to see how these proposals would be backed up by a change in the law as currently neither the gender pay gap regulations nor the Equality and Human Rights Commission’s [(EHRC)] powers under the Equality Act 2006 give the EHRC the power to take the action it is proposing in the consultation document.
“This is due to the definition of ‘unlawful act’ in the Equality Act 2006, which refers back to a breach of the Equality Act 2010. The 2010 Act does not make it unlawful not to publish gender pay data, it only gives the government the power to make the regulations. The government had the opportunity to introduce civil or criminal sanctions into the regulations but it chose not to do so. Therefore it is hard to see how an employer's failure to publish the data would be a breach of the Equality Act 2010.
“No change to the law is mentioned in the draft papers and indeed the EHRC has previously said it did not think it had the power to enforce gender pay reporting under the regulations when they were originally drafted. However, it could well be that the EHRC has the backing of the government and that in due course the government will amend the regulations, or one of the Equality Acts, to make the draft enforcement proposals work."
