What’s in the Gender Pay Gap (GPG) Information Bill?
The Bill does not itself contain gender pay gap reporting obligations but creates a power to make Regulations mandating employers to report on their gender pay gaps. As such, the Bill is relatively light on detail and we can expect a consultation on draft Regulations quite soon after it becomes law. The Regulations are expected to provide clarity for employers on what will be required (see below), although there is the potential for delay because they will need to properly implement the requirements of the proposed EU pay transparency directive.
An organisation’s GPG will be significant when it comes to its reputation, recruitment and retention of staff, and client expectations. Where GPG reporting will likely be a recurring annual requirement, with possible publicity around each year’s figures, an employer’s approach to its GPG and the measures it takes to narrow any gap must be considered.
Who will be affected?
The Bill currently provides that the Regulations will initially only apply to those organisations employing 250 or more, before reducing to 150 after two years and 50 after three years.
What must be reported?
As currently drafted, the Bill requires in-scope employers, including public body employers, to report on the difference in male and female remuneration as follows:
- Mean and median hourly remuneration for full-time and part-time
- Mean and median bonus remuneration
- Percentage of all employees who have received a bonus or benefits in kind.
The Bill also indicates that additional regulations may be enacted to provide further clarity on:
- The class of employer, employee and pay to which the regulations apply
- How the remuneration of employees is to be calculated
- The form, manner and frequency in which information is to be published
Unlike the similar UK legislation, affected employers will also be required to provide a narrative to accompany the reported figures in order to explain, in their opinion, the reasons for the gaps identified in their report and, significantly, to outline the measures that employer will take to reduce the GPG identified.
It is likely that the information will have to be published annually on both an employer’s own website and a publicly accessible government website (similar to the UK approach).
Will there be consequences for failure to comply?
Yes. The text of the Bill provides for sanctions for non-compliance with the appointment of “designated officers” empowered to investigate and prepare a report on how an employer prepared its calculations and reporting of final figures. These officers will be able to enter the business premises and seek copies of relevant information.
In addition, the Irish Human Rights and Equality Commission (IHREC) will have the ability to apply to the Circuit Court for an order directing compliance with the regulations. The revised Bill proposes to further extend IHREC powers allow applications to the High Court for enforcement orders.
Further, an employee may take a claim to the Workplace Relations Commission (WRC) where his/her employer is alleged to have not complied with the mandatory reporting obligation. The WRC can order a specified course of action to ensure compliance. Currently the Bill does not provide for any monetary sanctions for breaches, although it is notable that the Minister has referred to strengthening the enforcement mechanisms within the upcoming draft legislation.
How can employers get ready?
There are a number of proactive steps that employers can take in advance of GPG reporting coming into law.
- Trial run – identify the relevant employee groupings (quartiles) across the business and collate and analyse the payroll data attached to each quartile
- Technology – assess whether the business has the necessary software and/or hardware to process the calculations required
- Training – consider what types of training, ranging from payroll staff to HR teams and management, may be appropriate
- Policies – review existing HR policies around recruitment and promotion. Evaluate the business’ approach to remuneration and compensation to establish whether such policies indicate any unintentional gender bias. The implementation of a comprehensive flexible/agile working policy will be a core element in facilitating increased female representation in the labour market
- Invest – explore ways to invest in your staff talent through upskilling and reskilling with a focus on gender diversity – in particular diversifying the leadership pool and implementing innovative methods around talent development and integration
- Expert Advice – obtain legal advice to ensure appropriate compliance with the regulations (i.e. what elements of a remuneration package should fall within the definition of “pay”; what data protection issues arise; how can issues of equal pay or discrimination be best addressed)
- Build your Team – identify the key stakeholders within the business that need to be brought together to comply with the reporting obligation and tackle the GPG identified. Input from and cross-collaboration between Finance, HR, Legal and Public Relations is advisable
- Communication – while mandatory reporting specifies the information to be published, employers must be mindful of the internal and external messaging of both the existence of its GPG and the measures to reduce it, to minimise scope for employee grievances or claims
Separately, employers should consider who the key stakeholders in the business are likely to be. In order to be done properly, gender pay gap reporting normally requires the involvement of a team of people from across the business. These include: payroll (to obtain the pay data), HR analysts (to collect the people data); more senior level HR/ER (to understand the initiatives that can be created or which may already exist to reduce any gaps); and PR/comms (to assist with writing the report).
Need more help? Voltedge Management team can help you to get advice on all aspects of human resources and management. Email Ingrid at firstname.lastname@example.org or ring our offices at 01 525 2914.