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Large companies should prepare for the operational reality of forthcoming gender pay gap reporting obligations, writes Beauchamps partner Sandra Masterson Power

The long-awaited Gender Pay Gap (Information) Act 2021 was recently signed into law, and now awaits commencement orders to kickstart the obligations it sets down for employers. The aim of the legislation is to provide transparency on gender pay gaps (GPG) that exist within organisations.

The GPG is not about equal pay for like work. This is already legislated for under the Employment Equality Acts 1998-2015. It is the difference between the average pay of women compared to men in an organisation. The legislation is being introduced as part of a wider legal strategy to address disparity in gender gaps and employment rates. It also aims to ensure accountability and transparency for employees.

Disclosure Obligations

The Act obliges employers to publish information relating to the pay of their employees for the purpose of showing whether there are differences in pay referable to gender, and if so the size of such differences. The information which must be published includes:

• The difference between both the mean and the median hourly pay of male and female employees
• The difference between both the mean and the median bonus pay of male and female employees
• The difference between both the mean and the median hourly pay of part-time male and female employees
• The percentage of male and female employees who received bonuses and benefits in kind.

Relevant employers will also be required to publish reasons for disparity in the above information as well as any measures proposed and/or taken to reduce such differences. Initially the new legislation will only apply to businesses with 250 or more employees, with that number decreasing over the course of three years to apply to companies with 50 employees or more.

In Association with

Gender Pay Gap Redress

Under the GPG legislation, employees who allege that their employer has failed to comply with the requirement to publish GPG information may refer a complaint to the Workplace Relations Commission (WRC). The WRC shall investigate a complaint where it is satisfied that a prima facie case exists to warrant their investigation.

Where the WRC upholds the complaint, it may order the employer to take a specified course of action in compliance with the disclosure obligations under the GPG Act. There is no statutory mechanism for awarding an employee compensation for non-compliance with the GPG Act. However, investigations and decisions will be public. This may have a deterrent effect from a reputational perspective for employers.

The Irish Human Rights and Equality Commission, where it is satisfied on reasonable grounds that an employer has failed to comply with the GPG reporting obligations, may apply to the High Court or Circuit Court for an order requiring the employer to comply. Following a request from a minister, the Commission may themselves carry out a review.

What's Next?

Regulations giving effect to the GPG legislation are expected to be published later this year. Until then there is an element of uncertainty for employers as to what precisely is expected of them. It is earmarked that the reporting process will commence sometime in 2022. In anticipation of the clarifying regulations, employers and HR practitioners should begin to prepare for the operational reality of the new reporting obligations, including awareness of potential publication and reputation management issues for non-compliance.

• Sandra Masterson Power (pictured) is Partner and Head of Employment in law firm Beauchamps.
T: +353 1 418 0600
E: s.mastersonpower@beauchamps.ie