Understand the impact of the delay

A failure to transpose an EU Directive on time is not insignificant. At a State level, it can expose Ireland to infringement proceedings and potential financial penalties. Employers will recall that Ireland has previously been fined for failing to meet transposition deadlines in other areas of employment law.

There is also a more immediate consideration. In limited circumstances, employees in the public sector may seek to rely directly on certain provisions of the Directive where they are sufficiently clear and do not require further legislative detail which is known as the doctrine of “direct effect”. While not all provisions of the Directive will meet that threshold, some may.

That said, Ireland is not an outlier. A number of Member States have yet to publish draft legislation, and some have indicated that implementation will be delayed or reconsidered.  Sweden is seeking to re-negotiate the Directive although it does not appear as if that will be accommodated by the EU.

How do I handle it?
Do not assume the delay gives you time to wait. The obligations are coming—possibly in stages—and 
preparation should already be underway

Expect phased implementation

The Government has indicated that the obligations under Directive will likely be introduced by way of national legislation on a phased basis, although there is little clarity as to how that will work in practice.

One of the earliest changes is expected to arise in the recruitment process. This will include obligations around providing information on pay levels at an early stage - potentially even within job advertisements, depending on how the Irish legislation is framed. In that regard, when the General Scheme of the Equality (Miscellaneous Provisions) Bill 2024 was published, provision was made for an obligation on employers to provide information about salary levels in the job advertisement, which goes further than the Directive. However, recently the Department of Children , Disability and Equality, which is the Government Department with responsibility for preparing the pay transparency legislation, has advised that it is still considering recommendations from last year’s Pre-Legislative Scrutiny Report on the General Scheme, so we are still some time away from having draft legislation to consider.

How do I handle it?
Start reviewing recruitment practices now:

• Are salary ranges documented and capable of being disclosed?
• Are hiring managers prepared for more transparency?
• Do existing templates and processes align with what will be required?
  

Prepare for significant operational changes

Although Ireland already has legislation providing for gender pay gap reporting in place, the Directive goes much further on that issue and other issues around equal pay and pay transparency. Once the Directive is implemented in Ireland, where an employer identifies a gender pay gap of 5% or more, which cannot be objectively justified and which has not been remedied within six months, a joint pay assessment with worker representatives will be required, which identifies the cause of the pay gap and the corrective measures that will be deployed to address it.

Employers will need to address:

• Pay transparency at recruitment stage.
• A prohibition on asking candidates about pay history.
• Restrictions on preventing employees from discussing pay.
• Greater scrutiny of how pay is structured and justified.

In addition, employees will have a statutory right to request information about their individual pay level and the average pay levels, broken down by gender, for categories of employees performing the same work or work of equal value. 

Employers in turn will have a statutory obligation to inform employees annually of this right and respond to such request within 60 days. 

Employers will also be required to actively inform employees of this right on an annual basis and respond to requests within a specific timeframe.

Furthermore, the burden of proof in equal pay claims will shift to the employer to prove there has been 
no breach of legal obligations in an equal pay claim.

How do I handle it?
Carry out an initial internal review:

• How is pay currently determined?
• Is there consistency across comparable roles?
• Are systems capable of providing the required data

Focus on “work of equal value”

A central feature of the Directive is the concept of “work of equal value”, assessed by reference to objective, gender-neutral criteria such as skills, effort, responsibility and working conditions. 

Employers will need to group employees into categories performing the same work or work of equal value. This is likely to be one of the most complex and time-consuming elements of compliance. 

EU-level guidance has already been published to assist with job evaluation and classification, and further Irish guidance is expected.  On 26th March last, the EU Commission and the European Institute for Gender Equality published a step-by-step toolkit on EU-wide guidelines on gender-neutral job evaluation and classification.

As we understand it, the Department of Children, Disability and Equality will now use this as the framework for national guidelines for employers to assist them with determining the relative value of jobs in an organisation using gender-neutral, objective criteria such as skills, responsibility, effort and working conditions.  Workshops are also expected to support employers to carry out their job evaluation exercises. Hopefully, this will be of assistance to employers in their categorisation exercises.

How do I handle it?
Begin thinking about how roles are categorised within your organisation. Even preliminary mapping 
exercises will put you in a stronger position once national guidance is available

Be aware of the consequences of non-compliance

The Directive strengthens enforcement in a number of important ways:

• Compensation for successful claims will be uncapped
• Employees may recover full back pay, bonuses, and other losses
• The burden of proof shifts to the employer
• Courts or tribunals may order employers to take corrective action

These provisions, combined with increased transparency, are likely to lead to more claims—
particularly in the early stages.

How do I handle it?
Take a proactive approach to risk:

• Identify and address potential pay disparities now
• Ensure decisions around pay are well-documented
• Consider how issues would be defended if challenged

Expect an increase in claims

Greater access to information, combined with stronger legal protections, will almost certainly result in an increase in pay-related disputes.

Employees who previously did not have visibility over pay structures will now be in a position to question differences, and employers will be required to justify them.

How do I handle it?
Put structures in place to deal with queries and complaints early. A clear, consistent internal approach 
will be critical

What should employers be doing now?

While employers may feel they are in a holding pattern until draft legislation is published, there are 
several practical steps that can be taken immediately:

• Review recruitment practices in light of anticipated transparency requirements
• Audit pay structures to identify any inconsistencies.
• Begin categorising roles by reference to objective criteria.
• Assess internal data systems to ensure they can support information requests.
• Provide early training to HR and hiring managers.

Conclusion

Although many aspects of gender pay gap reporting are already familiar to Irish employers, the Pay Transparency Directive represents a broader and more demanding framework. It is not simply an extension of existing obligations - it is a shift towards a far more open and accountable approach to pay. Employers who start preparing now will be far better placed to manage both compliance and risk when the legislation finally arrives