The gender pay gap is intended to show the difference in the average pay between all men and women across a company's workforce in Ireland. It should not be confused with existing equal pay legislation which renders unlawful any pay differences between men and women who carry out the same jobs, similar jobs or work of equal value.
Recent figures published by the Central Statistics Office suggest the gender pay gap in Ireland is approximately 14% (in favour of men), compared to an EU average figure from 2014 of 16.7%.
The current Programme for a Partnership Government includes commitments to address the gender pay gap and to promote wage transparency by taking measures which will force companies to reveal internal pay differences.
Arising from that, on 26 June 2018, the Department of Justice published the General Scheme of the Gender Pay Gap Information Bill 20181 (the "Bill").
The draft Bill purports to amend the Employment Equality Acts 1998 to 2015 and the Irish Human Rights and Equality Commission Act 2014.
The key elements of the Bill are set out below:
- The Minister for Justice will make regulations requiring regular publication of information on the gender pay gap in firms and which will apply to employers with 250+ employees (from commencement); employers with 150+ employees (two years after commencement); and employers with 50+ employees (three years after commencement);
- In addition to differences in hourly pay, information on differences in bonus pay, part-time pay and pay of men and women on temporary contracts will be among the data which must be published;
- The proportions of male and female employees in the lower, lower middle, upper middle and upper quartile pay bands must be published;
- The regulations may also require publication of differences in pay by reference to job classifications; and
- While the current draft of the Bill does not include fines for non-compliance, it does provide for complaints to be made by employees to the Workplace Relations Commission requiring compliance; for the Irish Human Rights and Equality Commission ("IHREC") to seek a Circuit Court order requiring compliance; and, for the Minister to direct an inspection by designated officers at a company's premises and/or to direct the IHREC to undertake a review of the relevant company.
The Bill will be debated before the Dáil and Seanad and may be subject to amendment before it is made law. It is expected to be brought into law before the end of the year.
UK and EU Position
Last year, the UK (excluding Northern Ireland) introduced legislation requiring private companies to publish gender pay gap information on an annual basis, both on the company's own webpage and on a Government website. Such published information must remain public for at least three years.
There are no fines for non-compliance but the UK Equality and Human Rights Commission has enforcement powers under equality legislation.
According to the OECD2, the Czech Republic, Estonia and Germany have the widest pay gaps. The pay gap in Ireland is comparatively lower. However, the OECD noted that in Ireland in particular, the pay gap among full-time employed highly educated men and women is higher than in other EU member states relative to the gap for lower skilled workers.
The requirement to publish gender pay gap information has the potential to cause reputational issues for companies.
It will be hoped by those companies disclosing a gender pay gap, that they will be permitted to include with such published information an explanation of the reasons for such gap (for example, that the lower paid gender are in more junior roles).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.