knowledge 2 June 2022 |

Gender Pay Gap Reporting: What Is Expected of Employers?

The Act has amended the Employment Equality Act 1998, and requires the Minister for Children, Equality, Disability, Integration and Youth (the “Minister”) to make regulations requiring private and public sector employers (subject to employment thresholds) to report and publish information relating to their gender pay gap, and, where there is a gap, to explain why there is a gap and what measures are being taken to reduce it.

Minister O’Gorman stated “Reporting of the gender pay gap by employers will provide accountability and transparency, helping to ensure that employers address the gender pay disparity between men and women.”

The Minister recently released new guidance on what will be expected of employers, and has signed the new Employment Equality Act 1998 (Section 20a) (Gender Pay Gap Information) Regulations 2022 (S.I. 264 of 2022) (the “Regulations) that give effect to the Act’s reporting requirements.

What is the Gender Pay Gap?

The gender pay gap is the difference in the average gross hourly pay of women compared with men in a particular organisation, and is a key metric in identifying whether women are represented evenly across an organisation. The most recent figures in Ireland outline that the gender pay gap is 14.4%.

The gender pay gap should not be confused with the concept of equal pay. The existence of a gender pay gap does not necessarily indicate discrimination by employers or that women are not receiving equal pay for equal work.

Will all employers in Ireland be affected?

The mandatory reporting obligations will commence in 2022 and will apply to private and public sector employers with 250 + employees.

Employers will need to carry out a headcount of all persons employed on a snapshot date in June 2022, including employees not rostered to work on that date and employees on leave, to determine if the reporting obligations apply.

The Act widens the scope to employers with 150 + employees from 2024, and to employers with 50 + employees from 2025. There will be no requirement on employers with less than 50 employees to report.

When do employers have to publish their Gender Pay Gap report?

Employers will choose a ‘snapshot’ date of their employees in June 2022 and will then need to report on their gender pay within six months of that snapshot date (i.e. by December 2022).

Employers to whom the reporting obligations apply will be required to calculate and publish the gender pay gap information in respect of relevant persons employed by them on the chosen snapshot date, with the calculations to be based on those employees' remuneration for the 12-month period that precedes the snapshot date. Employers are required to choose a snapshot date. The snapshot date must be in June but may be any date in June. Employers will be required to produce their gender pay gap information within 6 months of their snapshot date. Therefore, an employer who chooses 10 June as their snapshot date has a reporting deadline of 10 December.

If the number of employees reduces after the snapshot date, is the employer still obliged to produce the report?

Yes. Employers with 250 or more employees at the snapshot date in June 2022 will still need to report on their gender pay gap in circumstances where the headcount has reduced below 250 employees by the reporting date in December 2022.

What information needs to be reported?

The Act requires in-scope employers to report on the differences in male and female remuneration as follows:

• Mean and median hourly remuneration for all employees;
• Mean and median hourly remuneration for part-time employees;
• Mean and median hourly remuneration for employees on temporary contracts;
• Mean and median bonus remuneration  percentage of all employees;
• Percentage of male and female employees that received bonus remuneration;
• Percentage of male and female employees that received benefits-in-kind;
• The percentage of male and female employees in each of the employer’s lower, lower middle, upper middle and upper quartile pay bands.

In May 2022, the Department of Children, Equality, Disability, Integration and Youth (the “Department”) published guidance on how to calculate the above gender pay gap metrics, and this will be particularly useful for employers when navigating their reporting obligations. This guidance is available here. The Regulations also provide key guidance on complying with the reporting requirements and is available here.

Whilst the 2021 Act also reserves the right to oblige organisations to publish pay gap information by reference to job classifications, the Department also announced in May 2022 that organisations are not required “at this time” to provide any information based on job classifications.

In addition to reporting on the gender pay gap, in-scope employers will be required to publish, concurrently with the above gender pay gap information, the reasons for such differences, the measures (if any) taken or proposed to be taken by the employer to eliminate or reduce such differences.

The Minister has indicated that a central website onto which employers will be required to upload their information will be established and will be in place for the 2023 reporting cycle.

How will the reporting obligations be enforced?

An employee who claims that their employer has failed to comply with the requirement to publish gender pay gap information may make a complaint to the Workplace Relations Commission (the “WRC”). The WRC will investigate the complaint and may order a specified course of action on the part of the employer to ensure compliance. However, there is no provision for financial compensation to the employee or for monetary fines to be imposed on the employer.

The Act also provides that where the Irish Human Rights and Equality Commission (“IHREC”) is satisfied that it has reasonable grounds for believing that an employer has failed to comply with the requirement to publish gender pay gap information, as provided for in the regulations, it may apply to the Circuit Court or the High Court for an order requiring the employer to comply. An employer that fails to comply with a Circuit Court or High Court order will be in contempt of that Court.

The IHREC may itself carry out, or invite a particular undertaking, group of undertakings or the undertakings making up a particular industry or sector, to carry out an equality review or prepare and implement an equality action plan. It will be for the IHREC to decide whether to exercise these powers following a request by the Minister.

What can employers do to prepare for Gender Pay Gap Reporting?

Since reporting requirements will commence from June 2022, we would encourage employers with 250 or more employees to start preparing for gender pay gap reporting as of now. Organisations will need to identify any potential pay gaps and establish an action plan to tackle their gender pay gaps.

There are a number of steps that employers can now take to prepare for gender pay gap reporting.

• Choose a Snapshot Date – the snapshot date can be any date in June 2022. This is the key for determining the employer’s headcount and, by extension, if the employer is required to publish its gender pay gap. Furthermore, this date will determine the reporting deadline for publishing the actual report.
• Stakeholders – identify the key stakeholders that are required for the business to meet its gender pay gap reporting obligations, such as payroll, human resources, external legal counsel, and public relations advisers.
• Resources – employers should ensure that they have the required resources within the organisation to carry out gender pay gap reporting, including the technology and software, which will be required to collate the data and carry out the calculations.
• Collate and Analyse the Data – identify the relevant employee quartiles across the business and collate and analyse the payroll data for each quartile. Compile a list of all the pay elements processed by payroll, including benefits in kind.
• Develop your Action Plan – as employers are required to report on the measures being taken to eliminate or reduce any pay gap differences, it is vital for employers to develop an action plan. If conducting a “trial run”, employers can use the period between the snapshot date and the reporting deadline to good effect in fine tuning the action plan which can include steps like reviewing recruitment processes, reviewing HR policies and procedures, setting gender targets for leadership positions, appointing diversity managers, supporting an uptake in flexible working across all employees, introducing transparent pay scales, etc.  
• Legal Input – seeking the input of your legal advisers at an early stage is key, particularly in understanding what is expected of employers, interpreting pay gap data, and offsetting the risk of discrimination claims. Furthermore, employers should be mindful of their data protection obligations when calculating and reporting on their gender pay gap. In addition, taking legal advice at an early stage is vital in ensuring that the process followed and output of such an initial review can be protected from disclosure (on the basis of legal privilege).
• Communications Strategy – employers should consider their communications strategy, both within their organisation and externally to the public, in relation to the existence of a gender pay gap within their organisation, and highlighting the action plan of measures being taken or proposed to be taken to reduce any gender pay gap identified.

Given the potential impact on employer’s reputation, recruitment and retention of staff, it is vital that compliance with gender pay gap reporting is managed carefully.

How we can help?

The McCann FitzGerald Employment, Pensions and Incentives team are available to answer any queries you may have in relation to the provisions of the Gender Pay Gap (Information) Act 2021 and can provide guidance and assistance to help employers prepare for their pay gap reporting obligations, developing an action plan, and publishing a compliant gender pay gap report. This briefing is for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.