‘Unlimited Fines’ for UK Employers Who Dodge Gender Pay Gap Reporting

‘Unlimited Fines’ for UK Employers Who Dodge Gender Pay Gap Reporting

The UK’s Equality and Human Rights Commission on Tuesday unveiled its enforcement plan for ensuring that organizations required under new regulations to publish their gender pay gap data do so by the deadline of April 4, 2018:

The Commission’s policy – which is open for consultation from today until 2 February 2018 – explains how the Commission will use a range of its 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.

The reporting mandate, which went into effect this past April, applies to all organizations with over 250 employees, who must publicly report any gender gaps in their pay data based on a “snapshot” of pay data from the year leading up to April 5. Employers have been slow to report, perhaps out of fear that attention to their pay gaps will harm their reputation and ability to attract talent. Among those that have reported, those that published suspiciously small or nonexistent pay gaps have had their data scrutinized in the press and in some cases amended their reports afterward.

According to People Management’s Emily Burt, only about 400 of the 9,000 employers affected by this mandate have submitted their reports so far, so the pace of reporting is likely to spike in the new year as the deadline approaches. Charles Cotton, senior performance and reward manager at the CIPD, tells Burt that most of these organizations have probably finished collecting their data, but may still be struggling to build a narrative that puts the numbers in context for their employees and other stakeholders:

“The biggest challenge for many organisations will be reporting on their gender pay data, not necessarily to the government, but to their own employees and people looking to join the organisation, the company board, investors and customers.

“For employers, this means considering the risks and opportunities of reporting in certain ways, the potential impact on your customer and employer brand, and what it could mean for your organisation. In the CIPD guide on gender pay reporting, we remind employers that this is their story, and their data, and it’s up to them to own that, and discuss the steps they will take in the future to reduce the gap.”