Government reforms (2): Time to close the gap – Gender pay gap enforcement

What do we already know?

We have been keeping you up to date on the Government’s proposals to introduce new gender pay reporting requirements and how our Gender Pay Gap Audit service can help you with this. For an overview of the reporting requirements see our February 2016 Newsletter Government reforms (2): Gender pay – mend the gap!

All private and voluntary sector employers with 250 or more employees in England, Wales and Scotland must now publish information on their gender pay gap under the GPGR. All listed public sector employers with 250 or more employees in England must publish the same information under the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017.

Private and voluntary sector employers must report the required pay gap information by 4 April 2018. Public sector employers in England must publish the required information by 30 March 2018.

What’s new?

1. Enforcement Consultation by EHRC

As we reported in our Blog Tougher-than-expected GPG enforcement, on 19 December 2017, the Equality and Human Rights Commission (EHRC) published a consultation on its plans for enforcement action in relation to the Gender Pay Gap Regulations (GPGR). The consultation is available here.  The consultation is due to close on 2 February 2018.

The clear message to large employers is that they take the GPGR reporting requirements seriously and that they accurately report the data by the deadline of 4 April 2018. If not, they risk being targeted by the EHRC for enforcement action with potentially unlimited fines.

The EHRC says that its main approach will be to seek informal resolution to non-compliance and educate employers on their statutory gender pay gap reporting obligations.

The EHRC intends to achieve high level compliance by raising awareness of the GPGR obligations and intends to publicise compliance rates and will promote enforcement work to encourage others.

Informal stage

Where an employer does not comply with the GPGR by the relevant reporting date, the EHRC will write to them after that reporting date and draw their attention to their obligations under the GPGR.  The letter will require the employer to:

• acknowledge the letter within 14 days; and
• confirm that they will comply with the GPGR:

• • retrospectively for the past reporting year within 42 days; and
  • on or before the relevant reporting date in the current reporting year.

Where the EHRC receives the necessary assurances it will monitor for compliance within the agreed timescales for both reporting years. Where the employer complies with those timescales, no further enforcement action will be taken in respect of those reporting years.

Formal stage

If the necessary assurances under the informal approach are not given, the EHRC will take enforcement action as follows:

• Investigate whether the employer has committed the suspected unlawful act (breach of the GPGR);
• Consider issuing a Notice to provide information and/or an Order to take steps to comply;
• If the employer fails (without reasonable excuse) to comply with either such Notice or Order or falsifies anything in relation to it, they risk a level 5 fine – which means no maximum limit on the amount they may be fined plus legal costs;
• Seek a formal Agreement (e.g. action plan for compliance) with the employer, but if this is refused an Unlawful Act Notice may be issued requiring the employer to prepare a draft action plan for approval within six weeks. Again, non-compliance could result in a “level 5″ e.g. unlimited fine plus legal costs.

The EHRC states that for 2018/19 it intends to focus its enforcement work on employers who have not published the information required and that if it has capacity to do so it will take action against employers for the publication of inaccurate data.

Comment:

Not only do employers need to ensure that they publish their GPG data by 4 April or 30 March 2018, they need to ensure that their data is accurate, given the EHRC enforcement plans.  This is also highlighted by the recent publicity concerning suggestions that some employers’ published gender pay gap data was inaccurate. Indeed, one in 40 of all large employers who have reported to date on the Government’s website appear to have published “statistically improbable” data since they have reported exactly the same number of men and women in the four pay quartiles. Some employers have reported anomalous data and then re-entered their information several times.

As we said in our blog, this all points towards the need to ensure that your GPG figures are professionally calculated in accordance with both the GPGR legislation and established statistical approaches. Being found to have messed up your GPG figures and suffering an EHRC investigation would be highly embarrassing.

If you are in any doubt, please do contact the Menzies Law on 0117 325 0921 and our expert GPG team will be delighted to help you, whether for just a quick look over your figures or to do the full calculation so that you can be getting on with your day jobs.

2. Guidance from Government and Equalities Office (GEO)

The GEO has published a toolkit for employers, aimed at helping close the gender pay gap (GPG). The toolkit, Gender Pay Gap: Closing to together: Actions for employers, sets out advice and actions that employers can take to improve and promote gender equality in the workplace.

The toolkit sets out a “to-do” list containing four recommended steps:

• Calculate and publish GPG information as required by law, in line with the relevant guidance;
• Analyse data to see how improvement can be achieved;
• Draw up and commit to an action plan; and
• Monitor progress and assign a member of the senior leadership to produce quarterly reports.