The number of UK employers that failed to meet their obligation to report their gender pay gap fell by 71% to only eight companies in 2023, from 28 in 2022 and 47 in 2019*, says leading specialist employment law firm GQ|Littler.
Nicola James, partner at GQ|Littler, says that the Equality and Human Rights Commission (EHRC), who is responsible for “policing” the gender pay gap reporting rules, has achieved this high level of compliance without having to issue a single fine.
Every employer with 250 or more employees is required to publish data on their gender pay gap, which, as part of the requirements, measures the difference between average (median) hourly earnings of men and women.
In 2023, an estimated 7,900 private sector businesses were required to report this data as part of EHRC’s efforts to increase pay transparency and gender equality in the workplace.
Nicola James explains that in the last two years there have been no “repeat offenders” of companies failing to publish their gender pay gap data (ie businesses that failed to report properly in one year then failing to publish again the next year) suggesting that the EHRC’s policy of naming and shaming companies that fail to report is helping with compliance.
James says: “The EHRC has taken a softly, softly approach to enforcement – rather than issuing fines at the first opportunity, that approach seems to have delivered impressive results. This is unlikely to be the only factor however driving compliance and should to be viewed in the context of the increasing global focus on pay transparency and pay equity”
The EHRC’s strategy to achieve this compliance has included alternative measures such as sending reminder letters to employers and social media activity and enforcement warnings to non-reporters. The EHRC’s website also publicly lists non-reporters to encourage compliance. Whilst the EHRC has not issued any fines it has entered into “Section 23” agreements with some employers, meaning they must comply with the legislation the EHRC believes it has breached while being monitored. Sector 23 agreements are used by the EHRC instead of investigations.
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