The Equality and Human Rights Commission (EHRC) has published a draft policy paper setting out the approach it intends to take in using its enforcement powers in respect of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (GPGR). The EHRC is consulting on the draft policy and wants to hear from businesses, representative bodies and anyone with an interest in pay gaps on its planned approach to enforcement. The consultation closes on 2 February 2018.
A recap – What do the GPGR require?
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.
Key elements of the draft policy
The draft policy states that informal action and cooperation are the EHRC’s preferred option, but that it will take formal enforcement action where employers do not comply. In 2018/19, the EHRC intends to focus its enforcement work on employers who do not publish the information required by the GPGR. If it has capacity to do so, it may also take action against employers for publication of inaccurate data, if the EHRC considers that it is necessary, proportionate and feasible to do so. This is notable as there have recently been reports in the Financial Times of organisations reporting gender pay gap information which is statistically improbable and consequently almost certainly inaccurate.
In respect of the private sector, following the reporting dates, the EHRC will assess the scale of non-compliance and decide whether it is necessary to take a staged approach to enforcement. If a staged approach is necessary, the EHRC will divide non-compliant employers by industry and contact a tranche of randomly selected non-compliant employers within each industry, based on the number of non-compliant employers overall and the scale of non-compliance in each industry.
Where an employer does not comply with the GPGR by the relevant reporting date, the EHRC will write to them after that reporting date:
- Drawing their attention to their obligations under the GPGR
- Requiring them to acknowledge the letter within 14 days
- Requiring them to confirm within their acknowledgment letter that:
- they will comply with the GPGR retrospectively for the past reporting year within 42 days; and
- they will comply with the GPGR 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. If, however, a private or voluntary sector employer does not comply at the informal resolution stage, the EHRC will carry out an investigation into whether they have committed the suspected unlawful act (ie breach of the GPGR). As part of the investigation process an employer may be required to provide information and documents in their possession or to provide oral evidence.
During the course of an investigation the employer will be offered the opportunity to enter into a written agreement requiring compliance. If an agreement is entered into but not complied with the EHRC can apply for a county court order. If the employer does not accept the offer of an agreement and the conclusion is that the employer has breached the GPGR, the EHRC will issue an unlawful act notice requiring the employer to prepare a draft action plan within a specified time, setting out how they will remedy their continuing breach of the GPGR and prevent future breaches.
Ultimately non-compliance can result in unlimited fines but there are a number of procedural hoops to jump through first and the employer will always have the option to comply retrospectively.
Employers can respond to the draft policy consultation online here: https://www.smartsurvey.co.uk/s/GPGRconsultation/.
For more information on how to calculate your organisation’s gender pay gap, visit Be Aware or contact your usual DLA Piper contact.