Regulations giving effect to the Gender Pay Gap (Information) Act 2021 ("Act") will be published in the coming weeks.
Although enacted in July 2021, the obligations under the Act have yet to come into force. Regulations are required before its reporting obligations apply to Irish based employers. Our previous advisory discussing the key provisions of the Act is available here.
In the meantime, employers can prepare to comply with the Act as we now know what information must be published and when gender pay gap reporting will apply to Irish employers.
Employers will be required to publish details setting out pay differences between female and male employees 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; and
- the number of male and female employees who are in each of four pay bands.
Employers will also be required to publish a statement setting out, in the opinion of the employer, the reasons for the gender pay gap in their organisation and what measures are being taken or proposed by the employer to eliminate or reduce that pay gap.
A gender pay gap is different to an employer's obligation to pay equal pay for like work. Employers are already required to pay equal pay under the Employment Equality Acts, 1998 to 2021. Many employers may have a gender pay gap for a variety of non-discriminatory reasons. Even so, certain steps can be taken by employers to reduce the gap.
Timing of Reporting Obligations
Employers who employ at least 250 employees will be required to publish gender pay gap information in December 2022. Such employers must choose a snapshot date in June 2022 to form the basis of their reporting. The gender pay gap information must be published on the same date in the month of December.
Two years after the date of commencement of the Act in 2024, these obligations will be extended to employers with 150 or more employees. Three years after the date of commencement in 2025, these obligations will extend to employers with 50 or more employees.
Employers should therefore focus on two key dates once they come within the scope of these reporting obligations. The six month gap between the chosen "snapshot" date and the deadline for publication of the gender pay gap should be utilised to identify the reasons for any gender pay gap that may exist and to identify and implement measures within the organisation to reduce the gap.
Measures to Reduce the Gap
In anticipation of a wider net of employers being required to publish this information and the corresponding effect on recruitment and retention, it may be prudent for employers to conduct test reviews with the benefit of legal professional privilege and prepare draft gender pay information reports to identify and assess any gender pay gap issues that might exist.
In a report published in 2017, the CIPD identified a range of issues that can result in a gender pay gap, including unpaid caring responsibilities falling predominantly on women, part-time working, occupational segregation and the undervaluing of women's work.
Improving family friendly leave and offering flexible working are two measures that could reduce a gender pay gap. We recently shared an advisory on family leave updates which can be accessed here. Improving family friendly leave supports a more equal sharing of family responsibilities between male and female employees.
The Right to Request Remote Working Bill 2021 ("Bill") as well as EU Directive on Work Life Balance for Parents and Carers ("Directive") are due to be implemented later this year. Both pieces of legislation are likely to help employers to reduce their gender pay gap by lessening the disproportionate burden effect of caring and family responsibilities on the ability of women to work full-time, remain in employment, and progress their careers.
The current draft of the Bill provides for a right to request remote working, not a right to work remotely. However, it is proposed that employers will be required to consider an employee's request, reply to the request within twelve weeks and provide good reasons why the request cannot be facilitated on business grounds. It is also proposed that employers be required to have a remote working policy in place.
The Directive is required to be implemented on or before August 2022. The Directive provides for a right to request flexible working arrangements for carers and parents of children up to eight years old. Flexible working arrangements are much broader than remote working.
Also on the horizon is the proposed Directive of the European Parliament and of the Council on improving the gender balance among directors of companies listed on stock exchanges, and related measures. This proposed legislation aims to improve the gender balance among non-executive directors of companies on listed stock exchanges. A general approach to this proposed directive was agreed on 14 March 2022. If passed, it would set a quantitative target for the proportion of female members on such boards of directors. Companies would have to take steps to reach, by 2027, the minimum target of having 40% of non-executive director positions held by women, or 33% if all board members are included. Companies that fail to reach these targets would have to apply clear, unambiguous and neutrally formulated criteria when appointing or electing directors. The next step is for negotiations between the Council and European Parliament with a view to agreeing a common position, so it may be some time before this proposal is implemented.
Consequences for Non-Compliance with the Act – Lack of Teeth
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 and if it is determined to be 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.
The Irish Human Rights and Equality Commission ("IHREC") will also have the power 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 first have reasonable grounds for believing that an employer is not complying with its obligations under the Act before it may take this action.
In some cases, the reputational implications of publishing a significant gender pay gap may be more significant than the compliance risk. For other employers, failing to publish their gender pay gap could have a direct impact on recruitment and retention in the current market. So, the sooner employers know the size of their gender pay gap the better!
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.