Overview

Since the introduction of mandatory gender pay gap reporting last year, it is now firmly on the compliance agenda of many employers. The gender pay gap (GPG) is the difference in the average hourly wage of men and women across a workforce. As a result of the introduction of The Gender Pay Gap Information Act 2021 and accompanying Regulations, employers with 250 or more employees are now obligated to monitor and publish a report on GPG metrics in their organisations by December of each year and give reasons for the differences in the average hourly wage of men and women across their organisation. By 2024, the Regulations will also apply to employers with 150 or more employees, and by 2025, the Regulations will apply to employers with 50 or more employees.

Impacted employers are also required to publish a statement setting out, in the employer’s opinion, the reasons for such differences and the measures (if any) being taken, or proposed to be taken, by the employer to eliminate or reduce such differences.

What have we learned from the first year of GPG Reporting?

2022 saw the first round of GPG reports published under the Irish legislation. For many businesses, this was their first time examining the GPG in their organisation, looking at the reasons for it and the measures that can be taken to eliminate or reduce it. More than 500 companies disclosed their figures. Some employers who did not meet the reporting threshold chose to do participate, particularly in light of the fact that the threshold is set to drop to employers with 150 or more employees next year and to those with 50 or more employees in 2025.

One point that is abundantly clear from the first tranche of GPG reports is that a robust statement and narrative is a key tool for employers when explaining the various factors which may contribute to the GPG in their organisation. We have seen over the last year how these statements and narratives have proved critical in response to strong stakeholder scrutiny and the "court of public opinion".

What information needs to be published?

Employers are required to calculate and publish the GPG information in respect of relevant persons employed by them on a chosen snapshot date in June (the relevant date for payroll data), with the calculations to be based on those employees' remuneration for the 12 month period that precedes the snapshot date. The report must be published in December of the same year.

In summary, employers must report the following information:

1. The difference between the mean and median hourly pay of male and female employees;
2. The difference between the mean and median bonus pay of male and female employees;
3. The difference between the mean and median hourly pay of part-time and temporary male and female employees;
4. The percentage of male and female employees who received bonuses and benefits in kind; and
5. The percentage of male and female employees in each of four quartile pay bands.

Who is an employee for the purposes of GPG reporting obligations?

One issue that proved particularly tricky for many employers last year was determining who fell within  the definition of “employee”. The definition of “employee”, for GPG purposes, is linked to the definition provided under the Employment Equality Acts 1998 – 2022 and, thus, is very broad.  In essence, it is anyone that could bring a discrimination claim. The net effect of this is that in certain circumstances, contractors who are engaged on an individual basis (i.e. not through an intermediary company) could come within the definition of “employee”, thereby meaning that they should be included for GPG calculation purposes. This is an issue which requires careful analysis as the approach can vary on a case by case basis.

How must information be published?

For the 2022 reporting cycle, the information had to be published on the employer’s website or in some other way, in a manner that is accessible to all its employees and to the public. It was expected that a central online reporting system would be in place for the 2023 reporting cycle, but no announcement has been made in this regard as of yet. In the event that a central reporting system is not introduced, then the information will again need to be published on the employer’s website or in some other way in a manner that is accessible to all its employees and to the public. One important point to note is that the information published must be available for a period of at least three years from the date of publication.

What are the consequences of non-compliance?

In terms of enforcement, the Irish Human Rights and Equality Commission (IHREC) may apply to the Circuit Court or High Court for an order requiring an employer to comply with the statutory GPG obligations. In practice, we expect court action by the IHREC to be rare and to be taken in circumstances where there has been a wholesale failure to comply.  We are not aware of any such actions having been taken to date.

Employers who fail to meet their GPG reporting obligations, run the risk of being held accountable by the court of the public opinion, with employers who fail to report potentially being highlighted by the media. This was certainly the case in 2022 when a number of media publications highlighted employers who had failed to report.

Employees may also seek to hold their employers to account and can refer an alleged non-compliance with the requirement to publish gender pay gap information to the Workplace Relations Commission (WRC). If the complaint is upheld, the WRC can order the employer to take a specified course of action to comply. The outcome may be appealed by either party to the Labour Court.  Significantly, there is no provision for compensation to be awarded to the employee who makes the referral or for a fine to be imposed but there may, of course, be adverse publicity for the employer as a result of media commentary on the referral.

What are the next steps for employers?

Given that the prescribed snapshot date has now passed, employers in scope are advised to take appropriate action to ensure that:

1. they are familiar with their GPG reporting obligations arising from the Regulations
2. they understand what data must be collated and analysed;
3. they establish a stakeholder group comprising HR, payroll and finance to project manage the GPG reporting exercise;
4. they nominate a date in June as their reporting “snapshot” date; and
5. they commence work gathering and analysing the data and preparing a report for publication.

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