25 September 2014 #Employment
Regulations come into force from 1 October 2014 making it compulsory for employment tribunals to order equal pay audits against non compliant employers in equal pay claims, unless certain exemptions apply.
In relation to claims brought from 1 October 2014, in the event that the employer is found to be in breach of the equal pay provisions, the tribunal must then go on to require the employer to carry out an equal pay audit. However, before doing so, the tribunal must consider the following circumstances and if they apply, an order requiring an equal pay audit must not be made:
There is also an exception for businesses under twelve months old, and those with fewer than ten employees.
Content of audits
The audits will require employers to provide the tribunal with a report detailing:
Employers must be given at least three months to complete the audit. The employer then submits their report to the tribunal, who will determine whether or not the audit is compliant with the Regulations. If it is, the employer must then inform employees of its content and publish the report on its website, if it has one, for a period of at least three years.
There is a penalty payable to the Secretary of State of up to £5,000 where an employer fails to carry out the audit without reasonable excuse.
In any event, employers need to be proactive in reviewing their pay structures. The new rules provide an added element of risk when faced with equal pay claims. Audits can only be ordered where an employer loses an equal pay claim. However, if one has to be carried out, the audit results have to be published. Employers may prefer to carry out an audit before going ahead with a hearing, given the exemption mentioned above.