Companies that fail to comply with their gender pay gap reporting duties could face “unlimited” fines and convictions, according to the enforcement plan published today by the Equality and Human Rights Commission.
Gender pay gap reporting
In its proposals, which are open for consultation until February, the EHRC said its first port of call would be to engage informally with employers in breach of the regulations, but that it would take enforcement measures for those that did not ultimately comply.
Private sector and voluntary employers in England with 250 or more employees must report their gender pay gap statistics by 4 April 2018. Public sector employers must publish the required information by 30 March 2018.
“We will educate employers about their responsibilities and hope to see widespread compliance. If that doesn’t happen, we won’t hesitate to resort to our more stringent legal powers,” said Rebecca Hilsenrath, EHRC chief executive.
The regulator said it would investigate any suspected breaches of the regulations by private and voluntary sector employers, inviting them to enter into a formal agreement to comply rather than face an investigation.
Employers that do not accept the offer of an agreement and that have breached the regulations could be issued with an unlawful act notice. This notice requires them to comply with an action plan, which can be enforced through court orders.
Those that still refuse to comply with a court order may face “summary convictions and an unlimited fine”, it said.
The EHRC said the purpose of taking enforcement action was to ensure that those that breach the gender pay gap regulations are “held to account” and to deter non-compliance by other employers.
It also hinted it may take action against employers for the publication of inaccurate data, “if we consider that it is necessary, proportionate and feasible to do so”.
Last week the Financial Times reported that around 5% of submissions that had been made to the Government’s gender pay gap portal so far were “statistically improbable”.
The body said it would assess the scale of non-compliance after the reporting dates and decide whether to take a staged approach to enforcement – potentially by sector.
Under the enforcement proposals, it would write to organisations that do not comply to draw their attention to their obligations, requiring an acknowledgement of the letter within 14 days.
These employers will then have to confirm that they will:
- comply with their gender pay gap reporting obligations retrospectively for the past reporting year within 42 days; or
- comply on or before the relevant reporting date in the current reporting year.
If an employer complies with either of these timescales, no further action would be taken.
Where the EHRC does decide to investigate, organisations may be asked to provide any information or documents to support their case.
Failure to respond to this could lead to a court order to require employers to submit evidence, after which the next enforcement action would be a “level 5” fine, meaning there is no maximum limit on their financial penalty.
The proposals are out for consultation until 2 February 2018.