Gender pay gap reporting: Spring 2021 update
Developments in Ireland
The introduction of gender pay gap legislation in Ireland was well underway up until the COVID-19 pandemic struck in 2020. The Gender Pay Gap Information Bill (the Bill) is now back on the agenda. Cabinet approval has been given to amend the Bill and to introduce a strengthened bill.
When implemented, the Bill will require employers (initially those employing 250 employees or more) to publish pay differences between female and male employees, including any bonuses. The Bill provides for the making of regulations through which the detail of this will be specified. By way of a recap on the Bill, read our insight here.
The amendments which are proposed to strengthen the Bill are:
- a more comprehensive definition of a public body to ensure the provisions of the Bill apply individually to all public bodies
- to address enforcement issues, including by providing expanded power to IHREC to make an application to the High Court for an enforcement order where warranted
- to require a review of the functioning of the legislation before the fourth anniversary of its commencement.
What should employers be doing to prepare?
As detailed in our infographic, there are a number of practical steps employers should be taking now to get their "house in order" before the Bill becomes law. In particular, employers should:
- Pay audit: identify the relevant "quartiles" across your employee headcount and gather and analyse payroll data.
- Technology: consider what software and hardware may be required to "run" the requisite calculations and ensure payroll teams receive appropriate training.
- Policies: review HR policies and compensation structures and evaluate recruitment and promotion practices to identify any unintentional gender bias that may impact on the overall GPG.
- Legal advice: seek advice at the outset to understand what elements of "pay" need to be inputted in the calculations. Identify and mitigate any equal pay or discrimination issues and ensure compliance with data protection principles. Depending on how the "trial run" is conducted, the output may be subject to legal privilege to the extent possible.
- Stakeholders: identify and work with key stakeholders, such as finance/payroll, HR, legal and public relations at an early opportunity to ensure a collaborative approach to reporting.
- Communication: given the potential impact on an employer's brand reputation, recruitment and retention of staff, it is vital that both the internal and external messaging of any GPG be managed carefully.
Developments at EU level
While the Bill makes its way through the legislative process in Ireland, it's worth noting that developments on gender in the workplace have also been taking place at EU level. There has been a proposal for a directive aimed at strengthening the application of the principle of equal pay for equal work between men and women through pay transparency and enforcement mechanisms. The proposal includes giving employees the right to comparative pay information and gender pay gap reporting obligations for employers with 250 or more employees. The proposed new rules would create a common standard throughout the EU.
The proposed directive would focus on equal pay for equal work in addition to pay gap reporting. Member States would have to take the necessary measures to ensure that employers have pay structures in place ensuring that women and men are paid equally for the same work or work of equal value.
The proposal must now go to the European Parliament and Council for approval and, once adopted, there would be a deadline of two years for transposition into national law. It is estimated, assuming the proposal is adopted, that this would be sometime in 2024.
We will provide regular updates on the progress of the Gender Pay Gap Information Bill and related developments. For more information please contact Triona Sugrue, Knowledge Lawyer, or any member of the ALG Employment team.
Date published: 11 May 2021