Preparing for gender pay gap reporting
The Gender Pay Gap Information Act 2021 (the Act) introduced the legislative basis for gender pay gap reporting in Ireland and regulations under the Act, setting out the detail of the reporting obligations (the Regulations), are expected imminently. The Regulations will require organisations with over 250 employees to report on their gender pay gap in 2022. These employers need to choose a "snapshot" date of their employees in June 2022 and then report on the gender pay gap for those employees on the same date in December 2022 (for further details please see "Gender pay gap reporting in Ireland: first details announced").
The Regulations are expected to provide further clarity for employers on what will be required. The Department of Children, Equality, Disability, Integration and Youth will also publish guidance for employers on how gender pay gap calculations should be performed (and possibly presented).
This article covers the current state of the reporting obligations and how employers can prepare for gender pay gap reporting.
It is known that:
- employers will be required to report on the gender differences in respect of the:
- mean and median hourly pay for full time and part-time employees;
- mean and median bonus pay;
- percentage of employees who have received a bonus or a benefit in kind; and
- proportions of men and women within each of the four quartile pay bands;
- as mentioned above, employers will choose a "snapshot" date of their employees in June 2022 and will compile a report on the gender pay gap comprising the above information for those employees to be published by the same date in December 2022;
- employers will be required to prepare a statement setting out the employer's opinion on the causes of any gender pay gap and what measures are proposed or being taken (if any) to reduce or eliminate any gender pay gap;
- the reporting obligation will initially only apply to organisations with 250 or more employees, before reducing to 150 or more employees after two years, and 50 or more employee after three years; and
- the Regulations will be enforced by the Irish Human Rights and Equality Commission who will be able to bring a claim in the High Court or Circuit Court to require employers' compliance. Employees will also be able to make a complaint to the Workplace Relations Commission, which can then force an employer's compliance.
However, the following is unknown:
- whether employers may be required to report on the mean and median pay gaps for employees on temporary contracts;
- how to calculate the pay and bonus gaps; and
- whether a statutory director or equivalent will have to confirm the accuracy of the statistics (as in the United Kingdom).
The Regulations should provide more detail for employers on how to prepare this information, including the definitions of:
- "benefit in kind";
- "temporary contract"; and
- "part time".
Preparing for gender pay gap reporting
There are a number of actions that employers can take in order to prepare for gender pay gap reporting:
- Employers should consider when they will be likely to have to report. Are they likely to be over 250 employees in June 2022?
- Employers can also start considering who the key stakeholders in the business are likely to be to prepare the report. These may include:
- payroll - to provide the pay data;
- HR - to collect the people data;
- more senior level HR/ER - to understand the initiatives that can be created, or which may already exist to reduce any gaps; and
- PR/comms - to assist with writing the report;
- Employers should:
- compile a list of all of the pay elements processed by payroll (including benefits in kind – although they are not monetary payments, they usually appear on payroll for tax reasons). They should ensure that they understand what they are all for and how they are used so that it will be easier to identify which are within the scope of the Regulations once they are published;
- make sure their HR data is up to date, and that they have gender data for everyone, and if not send a reminder to those that have not provided it asking them to do so; and
- start looking at the initiatives that they are taking to increase gender diversity – employers should compile a list and try to identify what results these initiatives might have achieved. There is research showing the initiatives that are supported by evidence and those that are not, so they should consider whether they might start doing more of those that work and less of those that do not.
- The best way to identify causes of gaps is to gather additional data on job title, department or grade and drill down, calculating a variety of other statistics. This can help to build a picture of the biggest contributors to gaps and identify the target areas for change. Employers should look to see what possible categories of data are available for doing more granular analysis.
For further information on this topic please contact Síobhra Rush at Lewis Silkin Ireland by telephone (+353 1566 9876) or email ([email protected]). The Lewis Silkin Ireland website can be accessed at www.lewissilkin.com/.