Gender Pay Gap Information Act 2021 – Mandatory Requirement for Employers

New legislation introduces a mandatory reporting obligation on certain employers to provide information on their gender pay gap.

The Gender Pay Gap Information Act 2021 amends the Employment Equality Act 1998 - 2015 and requires certain employers to publish information relating to the remuneration of their employees by reference to the gender of such employees for the purpose of showing whether there are differences in such remuneration and, if there are such differences, the size of such differences and to require such employers to publish statements setting out the reasons for such differences and the measures (if any) taken, or proposed to be taken, by those employers to eliminate or reduce such differences.

In 2018, the gender pay gap in Ireland was 11.3% in favour of men.

All employers with over 250 employees will be required to publish this information by December 2022, so time is of the essence. Those employers with over 150 employees will be required to comply in 2024 and those with over 50 employees in 2025.

Employers with 250 or more employees were required to choose a ‘snapshot’ date in June 2022 and report no later than the corresponding date in December 2022. A headcount of all persons employed on the snapshot date should be calculated, including employees not rostered to work on that date and employees who are on leave. In instances where an employee does not identify as either male or female, they may be omitted from the gender pay gap calculations.

Gender pay gap information must be published on the employer’s website, or in some other way, that is accessible to all its employees and to the public. Where the employer does not have a website, it must make the data available in physical form for inspection during normal business hours by its employees and the public at its registered office or principal place of business. Employers are required to ensure that their gender pay gap report remains available and accessible for not less than three years from the date of publication, or on which they were made available, as the case may be.

The Minister has indicated that a central portal will be established in 2023 to which employers will be required to upload their report. This system will allow members of the public to search for and view individual employers’ returns, as well as returns for employers in given sectors and regions.

Setting Out Pay Differences in the Report

Gender Pay Gap is the difference in the average hourly wage of males and females across a workforce. In setting out pay differences, employers will be asked to include the following in their report:-

the difference between the mean and median hourly pay of male and female employees expressed as a percentage of the mean hourly remuneration of relevant employees of the male gender.
the difference between the mean and median bonus pay of male and female employees expressed as a percentage of the mean bonus pay of relevant employees of the male gender.
the difference between the mean and median hourly pay of part-time and temporary male and female employees expressed as a percentage of the median hourly remuneration of relevant employees of the male gender on part-time or temporary contracts.
the percentage of male and female employees who received bonuses and benefits in kind.
the respective percentages of all employees who fall within each of

(i) the lower remuneration quartile pay band,

(ii) the lower middle remuneration quartile pay band,

(iii) the upper middle remuneration quartile pay band, or

(iv) the upper remuneration quartile pay band,

who are of the male gender and who are of the female gender.

Pay includes normal salary/wages paid to employees; allowances; overtime payments; pay for piecework; shift premium pay; pay for sick leave; any salary top-ups for statutory leaves like maternity leave/paternity leave/parent’s leave; pay for gardening leave.

Allowances includes payments for additional duties; related to location; for the purchase, lease or maintenance of a vehicle or other item; and, for the recruitment or retention of an employee.

Reimbursement for expenses, such as travel & subsistence should be discounted.

Bonus pay includes bonus payments in the form of money, vouchers, securities, securities options, or interests in securities, or, which relate to profit sharing, productivity, performance, incentive or commission.

Guidelines

Employers are advised to consult the guidelines published by the Government on 3rd June 2022, entitled Gender Pay Gap Information Regulations 2022, which are effective from 31st May 2022. The Regulations set out a number of calculations which will serve as a guide to employers when compiling their reports, including formulas for the calculation of the total number of working hours, mean hourly remuneration, median hourly remuneration and bonus remuneration.

See also “Guidelines for Gender Pay Gap Information Act 2021 – Updated Guidance Note for Employers on Reporting in 2022” published by the Department of Children, Equality, Integration and Youth.

Employers Must Take Action

It is important for employers to understand the legislation, to carry out wage surveys and reporting requirements within your organisations and to seek advice on how to reduce any imbalance identified. Identifying a gender pay gap should not be confused with the concept of equal pay for work of equal value. A gender pay gap does not indicate discrimination or an absence of equal pay for equal value – it reports a gender representation gap. It simply compares the difference in average earnings of all men with the average earnings of all women employed in your organisation at a given point in time. For example, if women hold more of the lower paid jobs in an employment than men, the gender pay gap is usually wider, even if an employer has an effective equal pay policy, it could still have a gender pay gap, e.g., where women are represented more than men in lower levels in the organisation. However, this will highlight the need for employers to set out the reasons for such differences and in conjunction with all stakeholders, the measures (if any) taken or proposed to be taken, to eliminate or reduce the gap.

Complaints of Non Compliance

An employee can bring a claim against their employer to the Workplace Relations Commission (WRC) in respect of non-compliance with the Act. While the Act does not provide for sanctions in the form of compensation for the employee or for a fine to be imposed on the employer, the Director General of the WRC can make an order requiring the employer to take a specified course of action to comply with the Act. All decisions will be published and will include the names of the employer and employee. Thus, employers are most likely to be held accountable by the court of the public opinion, with employers who fail to report potentially being highlighted by the media.

There is also scope for the Irish Human Rights and Equality Commission to apply to the Circuit Court or the High Court for the granting of an enforcement order requiring the employer concerned to comply with the Regulations.

If you would like to talk to us about any of the above issues, please get in touch with Brendan McGinty, Managing Partner, Stratis Consulting, at brendan.mcginty@stratis.ie or any one of our Partners.

Article written by Caroline Jenkinson.

Caroline Jenkinson | Strategic Adviser with Stratis Consulting, and Former Deputy Chairman of the Labour Court

Stratis Consulting

‘Strategic Employment Relations’

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