Mandatory gender pay gap reporting is new to Ireland and is likely to attract media attention and potential comparisons, particularly for multinational and higher profile companies. Deciding how best to communicate the gender pay gap – if it exists – will be important in averting any particular anxieties which may arise for employees and their representatives in particular.
Ireland’s unadjusted 11.3% gender pay gap, last reported in 2019, is below the then EU average of 14.4% (down to 13% in 2020 without Ireland, Greece and the UK reporting) and is explained largely by education, occupation, working time and enterprise size. It is pretty typical of most other EU states and addressing the EU gender pay gap is a key focus for the EC’s gender equality policy. It is also important for Europe in addressing the estimated 30.1% pension gap feeding the at-risk-of-poverty rate disparity between the sexes.
What organisations are in scope?
The first compliance deadline looms this December for employers of more than 250 employees. The workforce threshold numbers will decline on a staggered basis over the next two years but smaller employers with less than 50 employees are exempt.
Picking a snapshot date for reporting
The Employment Equality Act 1998 (Section 20A)(Gender Pay Gap Information) Regulations 2022 detail the reporting requirements for employers in Ireland. Organisations in scope this year (having more than 250 employees) are required to pick a snapshot date from last June and to report the results no later than 6 months later, December 2022.
Remuneration for work done in the 12 month period to the snapshot date is the basis for the reporting which spans a series of metrics. While a central official website is likely to be made available in the future, reporting on these metrics will, for now at least, require publication on the employers website with the information to remain public for a three year period. Where the employer does not have a website then the report must be made available to the public at the employers place of business or registered office.
But let’s begin with what workers are covered – or not.
What employees are in cover?
The definition of employee relied upon is contained in the Employment Equality Act 1998 which prohibits employment discrimination, whether direct or indirect, on a number of grounds including that of gender. The Gender Pay Gap Reporting regime sits within that context.
All employees, full or part time, absent or present, temporary or permanent, are covered. The definition of employee however extends to cover individual contractors engaged in providing services to the employer. This can be a tricky area to navigate where workers are on the fringes and with little official guidance available on it, CJEU case law remains the best compass. Exploring the concept further is beyond the scope of this blog but worth bearing in mind that workers who may not be classified by an employer as employees may nevertheless qualify as such for the purposes of gender pay gap reporting.
What must be reported
The Irish gender pay gap reporting regime will cover a series of metrics, all of which must be reported as a percentage. The metrics broadly break down as the differences between:
- the mean and median gap in employee hourly pay;
- and bonus between males and females
- between part time males and females
- between males and females on temporary contracts
- the percentage of male and female employees receiving bonus pay and benefits in kind.
This information must be expressed over 4 pay bands – a lower, lower middle, upper middle and upper remuneration pay band.
The statistics must be published together with a statement setting out what, in the employer’s opinion, are the reasons for any gaps and what measures the employer has taken, is taking or proposes to take to eliminate or reduce those gaps.
This statement will require careful crafting particularly given the potential for media, competitors, unions and other stakeholders interest in this new source of company data, particularly for the more prominent companies.
Enforcement is via individual complaints to the Workplace Relations Commission. The sole remedy available here is an order directing the employer to comply with the requirements – no compensation is payable to complainants.
Enforcement may also be initiated by the Irish Human Rights and Equality Commission, Ireland’s national and independent human rights and equality body. It published a Code of Practice on Equal Pay in February 2022, the aim of which is to guide employers on equal pay, the elimination of pay inequality and the resolution of pay disputes. While not legally binding, the Code is useful and is of persuasive value in formal workplace disputes. It is tailored to take account of the size and structure of employers.
How to report
First, decide if the requirements apply. They will apply based on workforce numbers de-escalating over a two year period from 2022-2024. So organisations employing more than 250 will be obliged to comply from a date in December 2022, depending on what snapshot date they chose from the previous June.
That reporting threshold reduces to cover organizations with more than 150 employees in 2023. Organisations employing more than 50 employees come into range a year later in 2024.
Secondly, those with 250 or more employees will calculate the number of employees on a chosen snapshot date in June 2022 and are required to report next month in December 2022. That workforce figure will include those who were absent (e.g. on maternity, parental, sick or other leave) on that June date.
Thirdly, do the detailed metrics. Official and detailed guidance is available here.
HR and communications
Then decide the communications strategy. Given that this is a public reporting, it may be wise for some companies to have specific communications for certain stakeholder groups. Deciding the messages necessary and important to contextualize the gap statistics to those stakeholder groups will be key. Organisations with a strong employee engagement ethos are likely to have involved employees in the overall gender pay assessment process however not all will do so. For good employee relations, those employees and their representatives should be communicated with either simultaneously or in priority to avoid any misunderstandings that might otherwise arise if employees receive that information from external sources in advance of their employers communication. Unions, works councils or other employee representative bodies are important stakeholders whose queries are best dealt with early on and before media comment.