The Gender Pay Gap Information Act 2021 ("Act") has been signed into law.
The Act, which has not yet commenced, provides for regulations to be introduced which will set out specific details of the reporting requirements for Irish-based employers. These requirements are likely to apply from 2022.
The main aspects of the Gender Pay Gap Information Bill 2019 are outlined in our previous advisory which can be found here.
Gender Pay Gap v Equal Pay
A gender pay gap refers to the difference in the average hourly wage of men and women across a workforce. According to the latest data from the Central Statistics Office, the average gender pay gap in Ireland is 14.4 percent, which is roughly in line with the European average.
An important point to note is that a gender pay gap is not the same as the obligation to pay equal pay for like work. Employers are already obligated to pay equal pay to both genders for like work. Like work is work that is:
- performed in the same or similar conditions as another employee;
- interchangeable with the work of another employee; or
- of equal value to the work performed by another employee.
There may be circumstances which justify unequal pay for performing equal work of similar value.
In Dr Oliver Lynn v Dr Katherine O'Reilly ADE/19/74, the Labour Court recently held that market conditions at the time of recruitment may justify different pay rates for comparable employees, provided the differences were proportionate, taking into account all aspects of the remuneration package.
Information on Gender Pay Gap to be Published by Employers
Under the Act, employers will be required to publish the gender pay differentials in their organisations, setting out pay differences between female and male employees.
Detailed information will be required including:
- the difference between both the mean and the median hourly remuneration of male and female employees;
- the difference between both the mean and the median bonus remuneration of male and female employees;
- the difference between both the mean and the median hourly pay of part-time male and female employees;
- the number of male and female employees who received bonuses and benefits in kind;
- the number of male and female employees who are in each of four pay bands;
- the reasons for any differences in the employer's opinion; and
- the measures (if any) taken or proposed to be taken by the employer to eliminate or reduce such differences.
The purpose of the reporting requirements is to show whether women are represented evenly across all levels of an organisation. These obligations will initially only apply to employers with more than 250 employees. After a period of two years has elapsed from commencement of the Act, these obligations will be extended to apply to employers with more than 150 employees. After three years have elapsed, these obligations will extend to employers with more than 50 employees.
Consequences for Non-Compliance
Under the Act, employees may refer a complaint to the Workplace Relations Commission ("WRC") alleging that their employer has failed to comply with their obligations under the Act. The WRC will investigate the complaint. If it finds the complaint well-founded, the WRC may order the employer to take a specified course of action. However, employees who make complaints under the Act do not have a right of compensation and there is no provision for monetary fines to be imposed on employers.
Separately, the Act empowers the Irish Human Rights and Equality Commission ("IHREC") to apply to the Circuit Court or High Court for an order directing an employer to comply with its obligations under the Act. The IHREC must have reasonable grounds for believing that an employer is not complying with its obligations under the Act before it may make such an application.
Key Takeaway for Employers
In anticipation of the regulations, employers should conduct test reviews and prepare draft gender pay information reports to identify gender pay gap issues that might exist and to understand the reasons behind it.
These might include differences in roles, part-time working, remuneration packages, and market conditions. Measures can be taken and/or proposed to narrow any gender pay gap in an organisation once the gaps have been identified. Self-awareness is the best starting point for employers.
Contact Walkers to discuss how this process can be carried out with the benefit of legal privilege.
Disclaimer © The information contained in this advisory is necessarily brief and general in nature and does not constitute legal or taxation advice. Appropriate legal or other professional advice should be sought for any specific matter.