The Government Equalities Office (GEO) has published a consultation paper on the introduction of mandatory equal pay audits.
The paper follows on from the 2011 Modern Workplaces: equal pay consultation.
From 2014, under the Enterprise and Regulatory Reform Act, employment tribunals will be able to require employers who are found to have committed a serious breach of equal pay law to carry out an equal pay audit to determine whether their pay system is discriminatory.
Employers ordered to complete an audit would have to address any pay inequalities identified which could not be explained by reasons other than gender.
The consultation paper confirms that audits will not be ordered where:
- The employer has carried out an audit satisfying certain requirements within the last three years.
- Current pay arrangements are transparent and it is clear without an audit whether action is needed to prevent equal pay breaches in the future.
- There is no reason to believe that the employer’s breach of equal pay law is a systematic problem.
- The disadvantage of an audit would outweigh its benefits.
Some further aspects have been decided. There will be power for employment tribunals to impose a penalty of up to £5,000 for non-compliance with an audit order and there will an exemption for start-up organisations and employers with fewer than 10 employees.
The consultation closes on 18 July 2013.