Latest Eurostat figures available (2017) indicate that Ireland’s gender pay gap lies at 13.9%. On International Women’s Day this year, the government announced the Gender Pay Gap Bill 2019 (the “Bill”). Currently in its Third Stage of review before Dáil Éireann, the Bill will amend the Employment Equality Acts 1998 to 2015. Once implemented, employers will be obliged to publish specific information relating to the gender pay gap within their organisations.
The ‘gap’ is not to be confused with the concept of equal pay for equal work. The gender pay gap is, instead, the relative difference in the average gross earnings of men and women within an organisation.
What is required?
Pursuant to the Bill, the Minister for Justice and Equality will introduce Regulations (the “Regulations”) which will require employers to publish information relating to;
- the mean and median difference between the hourly pay of male and female employees;
- the mean and median difference between the bonus remuneration of male and female employees;
- the mean and median difference between the hourly pay of part time male and female employees; and
- the percentage of male and female employees who received bonuses and benefits in kind.
Employers will have to also publish their reasons for any differences in pay, and the actions being taken to rectify this. These figures will have to be reported annually. Currently there is no confirmed system for reporting on the gender pay gap. It is hoped that the Regulations will provide clarity as to the basis for calculations and the form of publication.
Designated officers, vested with powers of entry and inspection, will be responsible for the enforcement of those provisions. These officers will have authority to order the supply of records and information relevant to gender pay within an organisation. This necessitates accuracy of information in reporting methods.
Notwithstanding these enforcement provisions, an employer will not be penalised for inaccurate reporting. Rather, where the Irish Human Rights and Equality Commission is satisfied that it has reasonable grounds for believing that there has been a failure to comply, it may apply to the Circuit Court to grant an order requiring compliance. Failure to comply will result in an employer being held in contempt of court. According to a representative of the Department of Justice and Equality (“DJEI”), the reasoning behind this approach was to deprive an employer of the option of paying a fine as a means of avoiding publication.
An employee can also apply to the Workplace Relations Commission to investigate an employer who has failed to report on the gender pay gap in their organisation.
The Government has indicated that the Bill will be signed into law in Autumn 2019 and the Regulations will apply to employers from 2020 or 2021. The Regulations will be introduced on a phased basis, initially requiring employers with more than 250 employees to publish reports. This will decrease to 150 employees before the third anniversary of the Regulations and in time, it is hoped that the Regulations will apply to employers with more than 50 employees. Concerns have been expressed over the maintenance of privacy in organisations of 50 employees or less. However, the DJEI is of the view that a threshold of 50 employees will not prejudice the privacy of employees.
From a reputational perspective, it is important to actively reduce (with the goal of eliminating) the gender pay gap within an organisation. It is an employees’ market and workers are becoming increasingly conscious of the factors that set companies apart. These reports have the potential to adversely impact brand image and employee relations. As a result, this is something for employers to consider when reviewing recruitment and communications practises. It is noteworthy that employers have already begun preparations for reporting on the gap. According to CIPD, 20% of employers in 2018 conducted gender pay gap reviews, while this increased to 30% in 2019.
- Get their house in order. Conduct an audit of gender pay across their organisation before the Bill comes into effect so that they can rectify any inconsistencies in pay between male and female employees.
- Ensure systems are in place that allow data to be gathered, calculated and published.
- Educate employees who will be involved in gender pay gap reporting - Human Resources, Payroll, Information Technology, Finance, Legal, Personal Relations.
- Review approach to internal and external communications.