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Equal Pay - mandatory reporting

16 April 2015

The Small Business, Enterprise and Employment Act 2015 came into force on 26 March 2015, and with it came the requirement for regulations in the next 12 months which will force employers of at least 250 employees to publish information about their gender pay gap.

Although no draft Regulations have yet been published, this implements the power to force gender pay reporting for large employers contained in section 78 of the Equality Act 2010. The government has tried to persuade large employers to report gender pay information on a voluntary basis, but only four companies have published information in that way. This led to political pressure (particularly from Labour and the Liberal Democrats) for an
amendment to be made to (what was then) the Small Business, Enterprise and Employment Bill.

The need for mandatory gender pay in 2015 reporting highlights the fact that there is still a perception of a gender pay gap, 45 years after the first Equal Pay Act. Claims under equal pay legislation have, to date, mainly been brought by women employed in the public sector. Since 1 October 2014 employment tribunals have had the power to order employers to carry out and publish equal pay audits if they lose an equal pay or a pay discrimination claim and, combined with this forthcoming change in the law, this will mean that employees in the private sector will be more likely to bring claims in the future.

It may well be that the transparency of publishing gender pay information leads to the eradication of differences in pay at a faster rate as employers seek to pre-empt legal challenges.