Gender Pay Gap Information Act 2021

On July 13th 2021, the Gender Pay Gap Information Act was signed into legislation, introducing a number of new reporting requirements for employers in Ireland. While the legislation has been formally signed into law, details around the mechanics of reporting obligations have yet to be confirmed. Some companies have already began reporting on gender pay gaps on a voluntary basis.

The Gender Pay Gap refers to the disparity between the remuneration of men and women across the workforce, comparing the pay of all men and women, not just those in similar jobs or with similar experience or qualifications. Ireland’s gender pay gap is around 11.3%, slightly lower than the European average of 14.1%.

Gender pay gap reporting is part of a wider initiative from the Irish government to increase female participation in the workforce and address pay inequality.

Gender Pay Gap vs Equal Pay

There has in the past been some confusion between equal pay and a gender pay gap.

Equal pay, as laid out in the Employment Equality Act 1998, makes it illegal to pay someone of the opposite sex less or more for the same work.

In comparison, the gender pay gap has a much wider definition and refers to differences in remuneration between men and woman across various levels within an organisation. This information illustrates how factors such as seniority, full-time vs part time working arrangements and unconscious bias continue to fuel pay disparity between men and women.

Scope

The legislation will not be introduced unilaterally across all employers. Rather the Act sets out specific employee thresholds with a staggered introduction of reporting obligations.

Initially the legislation will only impact organisations with more than 250 employees. Any employers with fewer than 250 employees will be exempt from the regulations until the second anniversary of the legislation being introduced. Reporting obligations will only apply to organisations with fewer than 150 employees from the third anniversary. Any organisation with fewer than 50 staff will be exempt.

Reporting Obligations

Organisations will be required to upload the following information:

• Difference between the mean and median hourly remuneration of male and female employees

• Difference between the mean and median bonus remuneration of male and female employees

• Difference between the mean and median hourly remuneration of part-time male and female employees

• Difference between bonuses paid to male and female employees.

• Difference between benefits-in-kind paid to male and female employees

Wherein the information reported identifies a ‘gender pay gap’, employers will be required to provide an explanation for such disparity and to outline the actions which they are taking to address the issue.

While the frequency of reporting obligations has yet to be announced, it shall not be more than once per year.

Specific details on mandatory reporting have yet to be outlined by the Department of Children, Equality, Disability, Integration and Youth Affairs. It is however understood that the Department will establish a central website for employers to upload information. It is expected that this information will be publicly available in due course.

Enforcement

The legislation authorises the Irish Human Rights and Equality Commission (IHREC) with overall enforcement authority.

If the IHREC believes there has been a failure by an employer to comply with reporting obligations, it may make an application to the Courts to order the organisation concerned to comply with the regulations. It may also, upon request of the Minister, carry out a review of a particular industry or sector, and develop a corresponding equality action plan.

Employees will also be able to refer employers to the Workplace Relations Commission, if they believe that the organisation has failed to comply with the regulations.

Under the legislation, the Workplace Relations Commission may investigate complaints from employees and where complaints are upheld, it may order employers to take a specified course of action to comply with the regulations.

While there is no provision for financial compensation to the employee or to impose files on the organisation, the publication of a decision could result in significant reputational damage to employers named in the complaint.

Time for Action

Reporting obligations are expected to begin in 2022. It is critical that employers take steps now to prepare for the introduction of these obligations. These steps include:

• Engaging all relevant stakeholders including human resources, payroll, legal counsel, public relations advisors and others;

• Calculate and allocate resources for undertaking pay gap analysis;

• Start collecting and analysing data to assess whether, and to what extent, a gender pay gap exists within their organisation;

• Develop a plan for addressing gender pay gaps;

• Obtain legal advice on the data privacy implications of reporting. Personal data may need to be anonymised before publication;

• Develop a communication strategy, both internal and external, to provide an explanation for any pay gaps, and to clearly outline the steps which are being taken to address them.

When correctly handled, gender pay gap reporting can have a positive impact on organisations in terms of talent attraction and retention and brand reputation by demonstrating a commitment to diversity and inclusion.

For further information on Payroll or other services please contact Yolanda Kelly or Rodney O’Rourke.