The UK Government has published draft regulations which propose to introduce mandatory gender pay gap reporting. Similar ideas have recently been floated in Ireland.

Equal pay for equal work is one of the European Union’s founding principles, embedded in the Treaties since 1957. While some advances have been made in recent years, gender pay inequality still exists in Ireland. The latest data from Eurostat, the European Union’s official statistics body, reveal that Irish women earn almost 14.4% less than Irish men for their work.

Why the gap?

There are various reasons for the existence and extent of a gender pay gap. They include:

  • The type of jobs held by women and the sector in which they work;
  • Different workplace practices and pay systems;
  • Fewer women in senior and leadership positions; and
  • Part-time work due to family commitments. 

UK developments

Last month, the UK Government published draft regulations requiring private sector employers with 250 or more employees to publish gender pay information. Employers will be required to analyse data on 30 April each year and will then have 12 months within which to publish that data on a government-sponsored website on a date that suits them. The data must also be published on the employer’s own website in English and in a manner accessible to the public for a three year period. The idea behind the publication is that it will give employers a better understanding of any pay gaps identified, and it will facilitate comparisons with national and international figures. 

This is not a new development in Europe. Other countries including Portugal, France, Germany and Switzerland all insist on transparent pay and reporting systems to track their progress in implementing equal pay.

Implications for Irish employers

If Ireland opts to follow its UK counterpart in implementing gender pay publishing, the disclosures could potentially stimulate more equal pay claims which, until now, have been mainly limited to the public sector where wage information is more readily available. Likewise, employers may face negative publicity, affecting their brand reputation and morale.

That said, employers can gain comfort from the fact that the UK model is not overly rigid; there is no requirement to provide separate data for full and part-time employees or by grade or job type.

In order to prepare themselves, employers may have to think about:

  1. Beginning the process of analysing gender pay data;
  2. Identifying any pay disparities within the same roles and considering the reasons for the gap;
  3. Ascertaining how their data compares with the sector/industry average; and
  4. Taking steps to improve problem areas and addressing any trends that emerge.

Conclusion

Disparity in pay is an ongoing issue. It is clear that greater transparency will be required in setting pay levels and perhaps more importantly, justifying differences as they arise.