What are the potential consequences for employers of non-compliance with the gender pay gap reporting duty?
The draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 require employers with 250 or more employees in the private and voluntary sectors to publish figures showing their gender pay gap. The draft Regulations themselves do not include an enforcement mechanism or any sanctions for non-compliance with the duty, but the explanatory note to the Regulations states that failure to comply with the duty will constitute an "unlawful act" within the meaning of s.34 of the Equality Act 2006, which empowers the Equality and Human Rights Commission (EHRC) to take enforcement action.
In addition to the risk of enforcement action by the EHRC, employers should consider the potential damage to their reputation of non-compliance with the gender pay gap reporting duty. An employer that publishes information on its gender pay gap in line with the duty, along with an explanation putting the figures in context and providing details of steps that it is taking to address the gap, is likely to be more attractive to potential future employees than an employer that has failed to comply with the duty.
The Government has said that it will closely monitor compliance by employers to ensure that the measures are effective. It intends to publish tables showing employers' reported pay gaps by sector and aims to highlight employers that have published particularly full information. It may also publicise the identity of employers known not to have complied with the duty.
Separate legislation is required for public-sector employers. The Government's consultation on mandatory gender pay gap reporting for public-sector employers, which was published on 18 August 2016, suggests that the EHRC will be able to apply to the courts for a compliance order against any public-sector body that fails to report its gender pay gap.