The team at William Fry explains gender pay gap reporting and what Irish employers need to do.
Gender pay gap reporting obligations have begun in Ireland, with the publication of the first gender pay gap reports expected before the end of December 2022.
The Gender Pay Gap Information Act 2021 provides the legislative basis for gender pay gap reporting in Ireland. The long-awaited Employment Equality Act 1998 (Section 20a) (Gender Pay Gap Information) Regulations 2022 published on 3 June provided further detail on how to report on gender pay gaps.
The act and regulations aim to provide greater transparency on the gender pay gap and incentivise employers to take action to reduce their gender pay gaps.
Which employers are obliged to report on their gender pay gap?
Employers must select a date during June to be their ‘relevant date’ under the regulations. This can be selected retrospectively if employers who were required to select a date in June 2022 have not done so yet.
Irish employers who employ 250 or more employees – including those employed on a part-time basis – on their relevant date in June 2022 are obliged to report within six months of their relevant date.
This obligation will extend to employers who employ 150 or more employees in June 2024 and those that employ 50 or more employees in June 2025.
In determining their headcount, employers must consider all full-time and part-time employees on the employer’s payroll, including those on paid leave, those not rostered to work on the relevant date and those who have worked less than 12 months in the organisation.
Employers should be sensitive to how an employee identifies in terms of gender. An employee who does not self-identify as either male or female will be in the headcount, but the employer may omit that individual from their gender pay gap calculations.
The regulations do not define the terms ‘male gender’ and ‘female gender’. Gender pay gap reporting requirements should not result in employees being singled out and questioned about their gender.
What gender pay gap information are employers obliged to report?
Employers must calculate each employee’s hourly pay, rank them from lowest to highest, and divide the workforce into four quartiles. Thereafter, employers must calculate and report information on the following gender pay gap metrics:
- The percentage of men and women in the lower, lower-middle, upper-middle and upper quartile pay bands
- The difference between the mean and median hourly pay of male and female employees and that of male and female employees on part-time contracts and temporary contracts
- The difference between the mean and median bonus remuneration of male and female employees and that of male and female employees on part-time contracts and temporary contracts
- The percentage of male and female employees who received bonuses
- The percentage of male and female employees who received benefits in kind
Where the information reported by an employer shows differences in remuneration that are referable to gender, the employer must publish a written statement which sets out, in the employer’s opinion, the reasons for their gender pay gap. Any measures taken or proposed by the employer to eliminate or reduce gender pay gap must also be set out in the statement.
The regulations provide formulae and detail for the calculation of ‘ordinary pay’ and the hourly rate of pay for an employee who does not work fixed hours.
The Department of Children, Equality, Disability, Integration and Youth has published a guidance note and an FAQ document for employers, which also provide information on the required calculations.
For instance, the guidance and FAQs advise employers to adjust the payment of an employee who received bonus payments during the reporting period that relates to a period of longer than 12 months.
Where do employers need to publish their gender pay gap?
Employers must publish their gender pay gap report on their website to be accessible to employees and the public for at least three years.
Otherwise, a physical copy of the report must be available for inspection by employees and the public, during normal business hours, at the employer’s registered office or principal place of business. Similarly, the report must be available for inspection for at least three years.
The Government plans to develop an online reporting system for the 2023 reporting cycle consisting of a central portal where employer reports can be uploaded and accessed publicly.
How can employers prepare for gender pay gap reporting?
Employers with 250 or more employees must select their relevant date in June 2022 and ensure they plan to calculate their gender pay gap metrics before the reporting deadline – which is the corresponding date in December 2022. It may take considerable time to gather the required data, so employers reporting in 2022 should commence this exercise without delay.
Employers will be required to gather HR and payroll data for the 12 months immediately preceding their relevant date in respect of each employee employed by them on their relevant date.
The required data includes employees’ total ordinary pay, total bonus pay, hours worked, hourly remuneration and benefits in kind received. Employers must also record which employees worked full-time, part-time and temporarily.
Reporting is public, and an organisation’s gender pay gap reporting can have a significant reputational impact. Employees, prospective employees, the media and the public may access the report and the presentation should be considered carefully.
All employers should consider the gender pay gap metrics and measures they will adopt to address any existing gender pay gap. The statement allows employers to communicate the reasons for their gender pay gap, the steps they will put in place in the future to reduce their gender pay gap and the measures they are currently taking within their organisation to narrow their gender pay gap. Employers should embrace this opportunity.
As the reports are available for at least three years, comparing an organisation’s year-on-year progress will be easy. Bearing this in mind, employers should set realistic goals and not overpromise in their statement.
What happens if an employer fails to report?
The Irish Human Rights and Equality Commission may apply to the Circuit Court or High Court for a court order compelling any employer who falls within the act’s scope to comply with their reporting obligations if they have not done so.
Further, employees may refer a complaint that their employer has failed to comply with their reporting obligations to the Workplace Relations Commission. The Workplace Relations Commission can direct an employer to take certain action to comply with its reporting obligations.
By Catherine O’Flynn, Jeffrey Greene and Jenny Martin
Catherine O’Flynn is the head of William Fry’s Employment & Benefits department. Jeffrey Greene is a partner in the Employment & Benefits department and Jenny Martin is a senior associate in the Employment & Benefits department.
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