Legal
Gender pay gap (GPG) reporting continues to be a focal point for UK employers following the requirement for employers with more than 250 employees to publish details of their median pay and bonus gaps before last month's deadline.
Of the 10,400 companies that reported their data, 78% identified a gap in favour of men.
Hand in hand with the workplace culture shift that is being driven by the #MeToo movement, there is increased pressure on employers to be more transparent when it comes to pay. Recent media reports have brought the issue of GPG reporting for Irish employers back into the spotlight. So where are we now?
Is there Irish legislation on GPG reporting?
Not yet – but it's on the way.
Our most recent update (click here for our January 2018 alerter) highlighted the Government's publication of its legislative agenda for Spring/Summer 2018 and the intention to give priority drafting status to a new bill – the Gender Pay Gap (Wage Transparency) Bill 2018. This bill is progressing alongside another GPG-related bill – the Irish Human Rights and Equality Commission (Gender Pay Gap Information) Bill.
It has been reported in the past few days that the Minister of State for Equality, Immigration and Integration will bring the Heads of the Gender Pay Gap Information Bill to Cabinet for approval by the end of May. It is intended that the draft legislation will likely be enacted before the year is out.
Who will be affected?
The proposals initially follow the UK example and will target Irish employers with a workforce in excess of 250 employees. However, it is intended to cast this net wider and reduce this threshold to 150 employees within two years and thereafter to only 50 employees within a further year.
What needs to be reported?
The draft bill requires employers to publish data setting out the difference in average hourly and bonus pay for men and women; the proportion of men and women who receive bonuses and the number of men and women across four different pay categories
Are there sanctions for non-compliance?
Yes.
It is anticipated that Irish employers that fail to adhere to the reporting requirements will face significant fines and be subject to Circuit Court compliance orders. There may also be scope for on-site inspections by the Workplace Relations Commission.
In addition to such sanctions, Irish employers will no doubt be influenced by the intense scrutiny of the GPG issue by the UK media to date, and be mindful of the potential reputational fall-out of being associated with any negative data.
Action Points
As detailed in our previous alerter, Irish employers have a unique opportunity to take steps to get their house in order early and identify (and potentially rectify) pay disparities in advance of the above GPG reporting obligations coming into law:
1. Pay Audit: Irish employers are advised to start to gather and analyse their payroll data, as well as review their existing HR policies and compensation practices, to determine whether there is any unintentional but identifiable gender bias.
This "trial run" or "preliminary review" will enable employers to diffuse any equal pay or discrimination issues before they hit and identify any technology supports or staff training that may be needed to ensure compliance with the calculation and reporting requirements.
2. Legal Input:
a. Data Protection: The collection of such data as part of this review will naturally give rise to other concerns from an employer's perspective, not least ensuring the General Data Protection Regulation (GDPR) is not infringed in carrying out this audit.
b. Consider the Explanation: The UK GPG regulations enable UK employers to incorporate a "Rationale" when reporting their pay data. It is likely that the Irish approach will follow suit and the inclusion of such an explanation, setting out the context behind the reported GPG data, will be critical for employers. The content of this narrative will clarify the meaning behind the data reported and seek to minimise the risk of a GPG being incorrectly regarded as indicating an equal pay issue. This Rationale would also be a useful opportunity to set out any measures envisaged by the employer to tackle any GPG identified.
Taking legal advice at any early stage will go some way towards navigating these precarious waters, not only in terms of advising in respect of potential legal issues, but also ensuring that the process followed and output of such an initial review can be protected from disclosure (on the basis of legal privilege).
3. Identify your stakeholders: In addition to seeking legal support in ensuring GPG reporting compliance, employers will need to identify other stakeholders, ranging from their Finance/Payroll teams to collate and analyse the data, to their public relations or marketing advisors to manage the message. Human Resources will also be involved to address any employee grievances that may arise in light of reported data.
Conclusion
The introduction of mandatory GPG reporting in Ireland is no longer a question of "if" but a question of "when". Irish employers have been forewarned of what is likely to be a complex and time-consuming compliance exercise and now have an invaluable opportunity to learn from the experiences of UK employers in this field to date. Significantly, GPG reporting is not a "once-off" phenomenon – UK (and likely Irish) employers will be required to publish their GPG data every year. The spotlight on this year's data will likely shine even more closely on next year's data – and what UK employers have achieved in terms of narrowing the gap.
This is one spotlight that is showing no signs of dimming. Now is the time for Irish employers to start getting prepared for the introduction of mandatory GPG reporting. We will be following legislative progress closely over the coming months and will be publishing practical guidance on compliance with the reporting requirements once they are finalised.
By Ailbhe Dennehy, Senior Associate, of A&L Goodbody.