06 March 2018 by Joanna Gregson
The UK equalities watchdog aims to start action against 100% of those flouting reporting requirement within year of deadline
Gender pay gap reporting is a crucial first step towards employers understanding inequalities in pay and putting in place measures to address their causes.
As the body responsible for enforcing equality laws in Great Britain, the Equality and Human Rights Commission (EHRC) has the power to take action against employers who do not comply with their reporting obligations.
Hundreds have already reported and several thousand more have registered on the portal, so we expect to see a significant spike in reporting ahead of the deadline.
Where necessary, though, we will use our powers under the Equality Act 2006 to take action against those who do not comply with the law.
For private and voluntary sector employers, this will take the form of a ‘section 20 investigation’ to establish whether an unlawful act (in this case, a breach of the reporting requirements) has been committed, followed by issue of an unlawful act notice and, if necessary, an application to court for an order, the breach of which can lead to an unlimited fine.
It is important to note that enforcement action carries with it reputational risks – not least, because we are required to publish terms of reference at the start of any investigation into an employer, along with the report of our findings at the end.
“We aim to have initiated enforcement action against 100% of non-reporting employers during the first year”
The huge amount of press interest around gender pay issues show no sign of abating and employers who deliberately flout the rules run the risk of negative publicity and backlash from disgruntled employees.
Through December and January we engaged with organisations across the public, voluntary and private sectors to gather feedback on our enforcement policy, and this will be published shortly.
We were impressed by the commitment that many of the respondents showed, not only to complying with the regulations, but also to taking a genuine look at their organisations and coming up with creative ways to address gender pay disparities.
To drive up reporting in the first year, we will initially focus our enforcement activities on employers who fail to publish their data.
Following the deadline, we will assess the scale of non-compliance and decide whether to take a staged approach, working with tranches across all sectors of business to ensure fairness and consistency. We aim to have initiated enforcement action against 100% of non-reporting employers during the first year.
We are already seeing positive examples of employers publishing their data ahead of the deadline, many of which are accompanied by narratives putting the figures into context and action plans explaining what they will do to address the reasons behind any gaps.
We strongly encourage others to do the same, and are ready to take action against those who do not.