WorkLife

Our thoughts on the world of employment law - and beyond.

Mandatory equal pay audits - inching slowly towards implementation

Those of you with long memories will recall that in July 2012, the government published its response to the equal pay proposals contained in the Consultation on Modern Workplaces. It confirmed that employers who lose equal pay claims might be required to conduct an equal pay audit.  A further consultation then took place from May 2013 and the results were published last week.

The response makes it clear that:-

  •  Regulations will set out the minimum requirements for the content of an equal pay audit where an employer has been found by an employment tribunal to have breached equal pay law (albeit that the tribunal will have discretion to specify further details and requirements);
  • Employment tribunals - not independent auditors as had been proposed - will be responsible for monitoring compliance with orders for an audit;
  • No additional guidance will be published on the requirements of the regulations (to do so would apparently duplicate EHRC guidance - but the government will ‘engage with’ business representative organisations before implementation);
  • Tribunals will have the power to impose financial penalties (but only up to £5,000) for non-compliance with audit orders;
  • Employers may be required to publish the results of equal pay audits in a format accessible to all affected staff.  In rare cases there may be a dispensation if publication would breach domestic or EU law.  (Wider publication had originally been proposed eg via the employer’s website or annual report but the consultation last year concluded that the disadvantages of so doing would outweigh the advantages.  However, unless the recipients of the audit results can effectively be gagged from wider disclosure - which seems unlikely - there may still be a real risk for employers that the audit information will end up in the public domain in any event).

The full draft regulations (made under section 139A of the Equality Act) can be found here.  They require a tribunal to order a respondent employer to carry out an equal pay audit unless one of the exceptions in regulation 3 or 4 applies).  These include - where an audit has been carried out in the last 3 years; it is clear without an audit what action is required to avoid equal pay breaches, or where an employer is a new business or micro business as defined (this exemption only applies for a 10 year period).

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