International Women’s Day 2022 – Gender pay gap reporting in Ireland

For International Women’s Day this year, the theme is ‘Break the Bias’. It would therefore seem like a good time to review the Gender Pay Gap Information Act 2021 (the ‘Act’) which amends the Employment Equality Act 1998 and requires certain employers to publish information on remuneration by reference to the gender of employees in order to shower whether there is a difference in remuneration linked to gender.

Whilst we are awaiting further regulations from the Minister for Children, Equality, Disability, Integration and Youth which will provide some of the specifics relating to the Act, employers can still start to plan for gender pay gap reporting.

What is the Gender Pay Gap?

In short, the gender pay gap is the difference in remuneration by reference to the gender of employees. It may highlight disparities in pay between women and men. The gender pay gap in Ireland currently is estimated to be around 14%.

Who has to report on the Gender Pay Gap?

Once the regulations are introduced, for the first two years, only employers with 250 or more employees will have to report their gender pay gap. Thereafter employers with 150 employees or more will have to report on or after the second anniversary of the regulations and then finally employers with 50 or more employees will have to report on or after the third anniversary of the regulations. Employers who have less than 50 employees are not required to report their gender pay gap under the legislation currently.

What information do employers need to provide?

Employers will need to publish the following information:

• The difference between the mean and medial hourly remuneration between males and females, expressed as a percentage;
• The difference between the mean and median bonus remuneration between males and females, expressed as a percentage;
• The difference between the mean and medial hourly remuneration of part-time employees between males and females, expressed as a percentage;
• The percentage of all male and female employees who received bonuses and benefits and kind.

If there are differences in any of the above, then the employer will have to publish a statement and outline what it believes are the reasons for such differences, and any measures which the employer intends to take to remedy the differences.

What are the possible consequences for an employer who fails to report on its Gender Pay Gap?

Firstly, the Irish Human Rights and Equality Commission would have jurisdiction to apply to the Circuit Court or High Court for an order required the employer to comply with the legislation, and should the employer then fail to do so, the employer would be contempt of court.

From an employee’s perspective, where their employer fails to comply with the reporting requirements, then the employee could make a complaint to the Workplace Relations Commission (‘WRC’). The WRC will investigate such complaints and may order a specified course of action to ensure the employer’s compliance. Interestingly, there is no provision for fines or financial compensation to the employee where the employer has failed to publish the gender pay gap.

How should employers prepare for Gender Pay Gap reporting?

There are a number of steps which employers should consider when preparing for gender pay gap reporting coming down the tracks. The first question is going to be establishing whether the employer will actually have to provide the information. We should have more information on the class of employer, employee and pay which the regulations apply to once the regulations have been published.

The employer will also need to consider which data it needs to analyse, which might involve getting payroll and HR on board. Depending on the size of the business this is likely to be a fairly detailed project, and employers will want to ensure that it has the necessary staff to assist with carrying out an audit of the documentation.

Once data has been reviewed and considered, it may well be that there is a gender pay gap. Employers will need to genuinely consider the reasons for this, as well as ways to reduce or eliminate such a gap. The employer will need to consider how it will communicate these points in its published statement.

It is likely that a public register, like that in the UK, with the details of each company’s gender pay gap will be online and accessible for the public. Therefore employers will need to consider the impact of the gap and any potential consequences they would like to avoid. For instance, there is the possibility that where an employer has a large gender pay gap that this may put future female recruits off applying for jobs with that company – therefore potentially worsening the gender pay gap further in future. This could be worse in certain more male dominated sectors.

Gender Pay Gap reporting around the globe

It is worth noting that there has been a growing global trend towards reporting on the gender pay gap in some form or another. For example, the UK brought in gender pay gap reporting in April 2017, and the legislation in Ireland is broadly similar to that in the UK. The UK’S legislation on the gender pay gap has to be reviewed by April 2022 and it will be curious to see whether changes to the legislation are applied or whether further detail or criteria to the reporting is added. This is something which we will be watching with interest.

Further afield, Australia has a different type of gender pay gap reporting whereby it collects data on the gender pay gap but it does not relate to individual companies. Rather the data is broader and show trends from a national and industry perspective. It will be noteworthy to see whether there are particular sectors in Ireland which have wider gender pay gaps, and whether those are ones which we might expect.

From a European perspective, and just as one example, Spain has required companies with more than 50 employees to submit their pay figures, evaluate their gender positioning and implement gender equality plans since 2020. The notion of the equality plan is particularly interesting. These plans have to make conclusions in respect of the following:

• recruitment processes;
• job classification;
• training and promotions;
• terms of employment;
• joint responsibility for workers’ exercise of their personal, family and work-life rights;
• the under representation of women;
• remuneration; and
• the prevention of harassment and sexual harassment on the grounds of gender.

Whilst not necessarily all of these are issues which Irish employers would want to deal with in creating their own statement on any gender pay gap, it might be helpful to consider these points and what employers are doing to reduce the gender pay gap.

These are just a handful of examples of the global experience on the issue.

Conclusion

We may not have all the details in respect of the gender pay gap reporting as yet, but it is an issue which employers should be alive to moving forward. It is clear that the gender pay gap is still a prominent issue, and employers will need to really consider all the aspects of their organisation – from recruitment to retention and promotion – when providing a statement on any differences on their gender pay gap.

The introduction of the legislation last year is certainly positive in terms of Ireland’s efforts to reduce the gender pay gap and to #breakthebias for women going forward.

For further information on this topic, please contact Laura Graham at lgraham@reddycharlton.ie