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Commission Sets Out Enforcement Strategy for Gender Pay Gap Reporting

The Equality and Human Rights Commission has launched a consultation over its proposed strategy for enforcing compliance with the gender pay gap reporting regulations. 

Under the regulations, voluntary, private and public sector employers with 250 or more employees are required to publish their gender pay gap figures by April 2018. According to Government figures, the regulations cover approximately 9,000 employers with over 15 million employees, representing nearly half of the UK’s workforce.

Enforcement Action

The Commission is the regulatory body responsible for ensuring that employers comply with these requirements. Under its proposed strategy, the Commission will take an informal approach initially with employers found to be in breach of the regulations, but will ultimately be prepared to apply more forceful action, such as unlimited fines and prosecutions, if employers continue to fail to comply.

The Commission’s policy – which is open for consultation until 2nd February 2018 – sets out how the Commission proposes to use a range of powers:

  • It may investigate suspected breaches of the regulations by private and voluntary sector employers and offer them the opportunity to enter into a formal agreement to comply as an alternative to continuing with the investigation. Such agreements can themselves be enforced if not complied with.
  • It may issue unlawful act notices against employers who do not accept the offer of an agreement and who are found to have breached the regulations as a result of the investigation. These unlawful act notices will require employers to comply with an action plan which can be enforced through court orders.
  • It may seek summary convictions and an unlimited fine to those who still refuse to comply with a court order.

Similar enforcement powers exist in relation to public sector employers.

Change on the Horizon

"Over 40 years since the ban on sex discrimination in pay, it is shameful that women continue to be held back. But change is on the horizon and it’s about time,” commented Chief Executive of the Commission, Rebecca Hilsenrath.

"The law now says employers must be transparent about pay for women, and our regulatory role is to make sure this happens,” she added. “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 - including enforcing unlimited fines and convictions."

Many Companies Still to Report

Worrying, even though the deadline for reporting gender pay gaps is only three months away, a new survey suggests that 90% of companies covered under the regulations have not yet complied. 

The survey, by consultancy firm RSM, found that only 502 companies have so far published the required figures. On a more positive note, however, 77% of companies have said they will be publishing their figures before the deadline, with only around 10% reporting being unable to produce the necessary information in time.

“It would be wise for employers to remember that gender pay gap reporting is an annual requirement and every year progress will be expected,” said an RSM spokesperson. “It’s therefore crucial for all affected companies to develop action plans to demonstrate their commitment to continually closing the gap.”

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