International Women's Day presents a timely opportunity to review progress in relation to legislating for the Irish Gender Pay Gap (the GPG).
There are currently 2 separate Bills progressing through the Irish legislature. There is a Government Bill, the Gender Pay Gap (Information) Bill 2018 and a separate Private Members' Bill, the Irish Human Rights and Equality Commission (Gender Pay Gap) Bill 2017. It is unclear at this point which Bill will ultimately be enacted. What is clear however is, that notwithstanding Brexit dominating the legislative agenda for the Spring Dail sittings, it is likely, sooner rather than later, that mandatory gender pay gap reporting will be implemented in Ireland.
What is the Gender Pay Gap?
At its simplest, the GPG is the difference in the average gross hourly rate of pay of women when compared with men in a specific organisation irrespective of their position. It is not about equal pay, that is a similar but different concept that employers already have to deal with. Recent studies indicate the gap in Ireland currently stands at 14%. There are many reasons for the gap, some of them are as follows:
- Women traditionally taking on more part time roles due to family circumstances
- More likely employed in lower paying industry sectors
- Less likely to take on more senior roles in their specific industry
Closing, or taking measures to narrow the gap, makes sense at a number of levels. The primary and most obvious one is that it is good for business. Organisations that value diversity and inclusion will increase their prospects of attracting and retaining talent; this will in turn increase employee engagement and morale, boosting productivity and, one would hope, ultimately the bottom line.
Need for legislation
In line with action taken in the UK and more recently France and Portugal, the Irish Government has committed to closing the gap. Two Bills have been published. As yet it is unclear which one will be enacted or indeed if it will be an amalgam of both Bills.
What does the draft legislation say?
The Government Bill requires that all employers with at least 250 employees (initially with the threshold reducing to 150 or more employees within 2 years and eventually to 50 employees within 3 years) publish information in relation to their gender pay gap. The Bill prescribes the formula to be applied to calculate the GPG and the form, manner and method of reporting. Failure to comply with the legislation will expose employers to a Class A fine on summary conviction. The Irish legislation is drafted to ensure that the legislation had some force. Criticism had been levied at the UK Regulations for lacking "teeth" as the only penalty is naming and shaming of employers who fail to comply. Employees will also be able to refer complaints to the Workplace Relations Commission for a specified course of action to ensure compliance with the reporting obligations.
Tips for employers
In advance of any mandatory GPG for those employers falling within the threshold, employers can take certain preparatory steps in anticipation of the new legislation:
- Audit – employers should conduct an audit of their employees, their rates of pay, salary bands, job classification, grading structure, fixed versus part time status and the nature of any bonus incentive schemes and how they work in practice. It may be necessary in a large organisation for an employer to engage specialised software to help calculate the GPG.
- Analyse – where the above audit shows gaps employers should try identify the reasons for the gaps. If the gaps disclose any underlining discrimination employers should tackle this now to try stave off any possible legal claims.
- Close – having identified any gaps and reasons for it employers should then try to rectify and close the gap. There is no easy fix to this. Employers will likely have to implement change at organisational level – this may involve changes in the organisation's flexible working policy and making this available to everyone at all levels in the organisation, encouraging men to avail of paternity and parental leave, and putting in place appropriate structures to review salaries and career paths in an organisation.