The deadline for reporting gender pay gap figures was midnight 4 April. What will happen if you missed it?
Larger employers (over 250 employees) were due to publish their gender pay gap figures by, at latest, the 4 April. Estimates of the numbers of companies due to disclose figures have been reported as between 9000 and 13000. A massive, last minute, dash to register resulted in 10029 companies publishing. It therefore remains unclear if all employers have registered. Further there have been a number of articles which have raised doubts about the accuracy of the figures some companies have published.
What will happen if you missed the deadline?
Although the gender pay gap regulations did not set out any penalty for noncompliance, in late 2017, the Equality and Human Rights Commission announced its intention to enforce the publication of figures using powers given under the Equality Act 2006 and 2010. The commission emphasised that its powers include the imposition of unlimited fines. Whilst these fines are potentially available under the commission's powers, when exercised through the county and sheriffs courts, the commission has stated that this will not be the first step.
The commission in its publication; "Closing the gap: Enforcing the gender pay gap regulations" specifically stated that the more serious enforcement powers will only be used where employers fail to engage with the commission. The first step will be to contact noncompliant companies by letter. The commission will draw the employer's attention to their obligations, requiring them to comply with the obligations within 28 days for any past years reporting and requiring compliance with the next reporting date. The commission will then monitor compliance. Only if this initial resolution cannot be agreed will further, more serious, steps be taken.
What happens if I do not comply?
If the company does not comply the next steps to be taken will be an investigation by the commission (a Section 20 investigation). Such investigations can include the requirement to deliver up documents to the commission. To have such notices set aside will require a court order.
The commission can offer the opportunity to enter into an agreement (a Section 23 Agreement) with them, if a company is prepared to commit to publish on time in the next reporting round and retrospectively report within and agreed period. Failure to comply with such an agreement will result in an application to the county court in England and Wales, or the sheriff court in Scotland, for an order that the company comply with its undertakings (a section 24 order) unless the company has sought a variance beforehand from the commission.
Has there been a breach of the Regulations?
If it is determined that there has been a breach of the regulations the commission has another option. It can issue an Section 21 Unlawful Act notice asking the employer to submit an action plan (a section 22 action plan) setting out how they will remedy their breach and prevent future breaches. If you ignore the notice then, again, the commission can refer the matter to court for an order that you comply. Such notices can be appealed in a court application if made within six weeks of the notice being issued. Failure to comply with any court order resulting from either application can result in unlimited fines.
Public Sector Employers
The commission has similar powers to seek publication of information from public sector employers. This is by way of an assessment, which is similar in form to the section 21 investigation process set out above.
What if I know our data is wrong?
The commission has stated that if data has not been calculated in accordance with the regulations then you will be treated as having not published, meaning that you will be subject to the processes set out above. Whilst the commission has stated that its first approach will be to identify those who have not published they also have the means to identify statistically improbable data and may take action against those who have incorrectly recorded data.
When will we know if the commission are unhappy?
The commission is taking a staged approach to enforcement dividing employers to industry sectors and working through each tranche. Employers will be selected at random and the first approach will be by letter.
What should we do now?
If you are contacted do not, under any circumstances, ignore the letter. Be prepared to publish retrospective figures and be aware that you need to be prepared to publish the next set of figures before the 2019 deadline. We recommend that you agree to do this before processes become formal.
If you have not collated the relevant data do it now, in preparation, as you may be contacted by the commission. The ACAS guidance "Managing Gender Pay Reporting" is very clear and helpful in setting out the steps you need to carry out to collate the correct data www.acas.org.uk/index.aspx?articleid=5768
If you have had issues with collating figures have you tried to correct these?
Examples of issues we have identified include:
- You have casual workers or contractors who are paid on the production of an invoice and it is hard to track dates they are working and payment made for their work. Have you put in place a way to try and monitor payments more accurately?
- You don't have a UK website on which to publish the gender pay gap. Are you going to set one up or how are you going to address publication of the information.
- Are you comfortable in your assessment of which workers are UK workers and who are overseas workers?
- If you have a complex company structure are you confident that you have identified the correct employer for staff when calculating employee numbers and would your contractual documentation support your arguments?
This is the first year for reporting so there is likely to be some sympathy for employers who have struggled with some of these grey areas. If however you have not taken steps to comply with the regulations and ignore the commissions communications this is likely to lead to enforcement action and given the negative publicity that is likely to cause then the situation may become damaging very quickly.