Moment of truth looms for companies as gender pay gap reporting rules take effect

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The obligation for companies to report the gender pay gap is now on the way to becoming law after the Gender Pay Gap Information Bill passed all stages of the process legislative last week.

The gender pay gap is the difference between the average salary of women and men in a given organization. It should not be confused with the concept of equal pay for equal work, which is already covered by employment equality laws.

The legislation aims to ensure transparency and employee accountability while helping to ensure that workplaces across Ireland become more equal.

Equality Minister Roderic O’Gorman has indicated he intends to put the regulations in place by the end of this year, possibly sooner. It is therefore likely that the reporting process will begin sometime in 2022.

The legislation will require employers with 250 or more employees to publish details of employees’ wages and bonuses in an attempt to show their gender pay gap.

The regulation probably provides that this threshold decreases to 150 or more employees after two years and to 50 or more employees after three years.

The rules will require the publication of the following information; the difference between the average and median hourly wages of male and female employees and the difference between the average and median bonus wages of male and female employees.

It will also require data on the difference between average and median hourly wages of part-time employees and finally, the percentage of men and women who received bonuses and benefits in kind.

The ‘average’ and ‘median’ requirements will be important for Irish businesses to understand.

The average pay gap is the difference between the average hourly wages of men and women across the organization. The median wage gap is the difference between a woman’s hourly wage at the average wage and that of a man at the average wage, that is, if men and women are classified separately in order of earnings, it is the hourly wage difference between the person in the middle of each list.

Employers will also be required to publish a statement setting out, in their opinion, the reasons for any differences and the measures taken or proposed by the employer to eliminate or reduce those differences.

In an age of scrutiny by stakeholders, these stories will be essential.

Regarding the application of the Gender Pay Gap Reporting, the Irish Human Rights and Equality Commission (IHREC) and the Workplace Relations Commission (WRC) will be the first referees.

When the IHREC is satisfied, on reasonable grounds, that an employer has failed to comply with the gender pay gap reporting obligations, it can apply to the Circuit Court or High Court for an order. forcing the employer to comply. The Irish Human Rights and Equality Commission may itself carry out a review or action plan at the request of the Minister.

An employee who claims that his current employer failed to comply with the obligation to publish information on the gender pay gap can file a complaint with the WRC.

The WRC will investigate the complaint if it is satisfied that there is an apparent case warranting the investigation. If the complaint is upheld by the WRC, it can order the employer to take specific action to comply with the gender pay gap reporting obligations.

The result may be appealed by either party to the labor court.

There is no provision for employee compensation or fines to be imposed, but investigations and decisions will be public. What should employers do to prepare? First, collect and analyze payroll data.

For large businesses, think about what software and hardware is needed to run the required calculations and make sure payroll teams are properly trained.

It is always best to ensure that your HR policies and compensation structures are up to date, but it is especially important to assess recruitment and promotion practices to identify any unintentional gender bias that could impact the business. overall gender pay gap.

Seek legal advice to understand which elements of compensation should be entered in the calculations. Identify and mitigate any issues of equal pay or discrimination and ensure compliance with data protection principles.

Depending on how the test is conducted, the exit may be subject to legal privilege to the extent possible.

Identify and work with key stakeholders, such as finance / payroll, human resources, legal, and internal and external communications teams, as early as possible to ensure a collaborative approach to reporting

Considering the potential impact on an employer’s brand reputation, recruitment and retention of staff, it is essential that internal and external messages of any gender pay gap be carefully managed.

Tríona Sugrue is a specialist lawyer in the A&L Goodbody Employment Practice Group.

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