Hundreds to face gender pay gap reporting investigations in June

Peninsula Team

June 18 2018

Large private sector employers were legally required to publish their first gender pay gap report by the 4th April 2018. Enforcement action is set to commence against those employers who have failed to publish their reports.

It was estimated 1,500 employers missed the legal deadline to upload their reports to the government website. The Equality and Human Rights Commission (EHRC) began their enforcement action by writing to these employers on the 9th April. They were given a further period of 28 days to comply with the gender pay gap reporting regulations or confirm that they were not legally required to produce the report, usually due to falling below the 250 or more employees threshold.

The next stage of enforcement action will see the EHRC carrying out an investigation under the Equality Act 2010. This will examine whether the employer has committed an unlawful act, i.e. they failed to meet the legal requirement to produce and publish a report, or not. These investigations will begin in June and the EHRC has power to serve a notice on the company to provide them with information and documents to aid the investigation.

Where the investigation concludes that an unlawful act has been committed, an unlawful act notice will be issued. This notice requires the organisation to issue an action plan within 14 days outlining how they will remedy the breach and prevent future breaches of gender pay gap laws. At any point during the enforcement process, employers can enter into an agreement with the EHRC to comply with the reporting regulations. Entering an agreement will end enforcement action but the employer can be subjected to court orders where they fail to comply with this in the future.

Ultimately, enforcement action can result in a summary conviction and an unlimited fine. More worryingly for many employers, the EHRC have announced that any employer who is investigated for an unlawful act will be publically ‘named and shamed’ by the body. This carries a significant reputational risk for those employers, especially due to the substantial public focus and reporting on this matter.

Once all organisations who are legally required to report have done so, the EHRC plans to turn their attention to the quality of the data that has been produced. Where data suggests inaccurate or “statistically improbable” results were reported, these employers could face enforcement action starting with an investigation into their results.

Importantly, employers who produced and published their report on time need to ensure they haven’t forgotten about gender pay gap reporting. The report is an annual requirement that requires compliance from those who have 250 employees on the snapshot date of 5th April each year, using the expanded definition of an ‘employee’. This means employers may drop in and out of the requirement, or find themselves legally required to publish a report for the first time, with enforcement action likely to follow where they fail to report.

For any advice, or for more information on the gender pay gap reporting service offered by our partner Croner Reward, please contact your Peninsula HR expert today.

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