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What you Need to Know about the New Irish Gender Pay Gap Reporting Requirements

As of December 2024, a significant change will be implemented in Ireland. Companies with 150 to 249 employees must publish their first gender pay gap (GPG) report, a legal requirement outlined in the Gender Pay Gap Information Act 2021. This is a substantial shift, especially for smaller organisations and their HR teams. One that will also extend to companies with 50 or more employees in 2025, having come into force for those with 250 or more employees in 2022..

The change in reporting requirements is one part of a much-needed broader strategy to improve female participation rates and employment gaps between genders. It won’t solve the causes of these differences alone, but it is a crucial and welcome element. However, it’s also adding an additional burden to HR teams in smaller organisations. 

Non-compliance with these regulations can result in significant reputational harm. Therefore, all companies must put in the work to ensure they fully understand and adhere to these reporting requirements. Yet, as our recent research uncovered, with just weeks to go, more than half of businesses remain ill-prepared, as only 45% have reviewed their pay rates by gender in the past year.

Here, we look at the crucial aspects of the gender pay gap and the new GPG reporting requirements.

What is The Gender Pay Gap?

Before delving into the implications of GPG reporting, it’s important to understand what the gender pay gap is. Essentially, a pay gap measures the difference between the average earnings of two groups—in this case, male and female employees. 

It’s also important to differentiate between the ‘gender pay gap’ and ‘equal pay.’ While equal pay laws mandate that individuals should earn the same for performing similar work, the gender pay gap considers broader pay disparities across all roles, regardless of seniority. 

Despite the fact women make up over half the world’s population, it remains the case that their contribution is unequal in terms of measured economic activity and the labour market. This means that while unequal pay may play a role in creating a gender pay gap, it is not the sole factor. 

The causes of the gender pay gap are complex and often stem from structural and societal influences, including:

  • Seniority—there is a continued lack of female representation at senior levels.
  • Occupational segregation—the tendency to predominantly associate one gender with typically stereotyped roles or industries, such as nursing, construction, or STEM.
  • Working hours disparities—wherein women are more likely to be employed in part-time roles than their male counterparts.
  • Care responsibilities—childcare and unpaid caregiving roles continue to impact women’s availability for work and career progression more than men’s.
  • Outsourcing business models—some common business practices, such as relying on temporary or agency workers, inadvertently disadvantage women.
  • Discrimination—there are ongoing biases and policies that advantage men.
  • Bonus and overtime discrepancies—meaning positions or job roles typically filled by men are awarded additional compensation, while predominantly female positions and roles are overlooked.

As such, GPG reporting is not just about compliance. It’s a step towards enhancing pay transparency and reducing the disparities between male and female participation and earnings in the workplace, fostering a more equitable and inclusive environment for everyone.

What Does Gender Pay Gap Reporting Entail?

Under the Act, employers with 150 or more employees must publish information on their gender pay gap. In brief, the metrics gathered must include: 

  • Gender-based differences in mean and median hourly remuneration
  • Mean and median bonus payments paid to women and men. 
  • The percentage of male and female employees paid a bonus or benefits in kind

Each organisation must also publish a broader explanation, giving the underlying reasons for any gap and what measures it will take to address it. 

Organisations have to make the information publicly available and accessible to anyone for at least three years. Plans are in place to create a central government portal (similar to the UK) where companies can upload their reports. However, it has yet to be released, so, in the interim, organisations should upload their reports to their company website. 

In practice, businesses will need to follow a carefully laid out plan and include the following steps:

  1. Identify all employees as of a specified snapshot date in June 2024, for example, 15th June.
  2. Collect data to analyse both ordinary pay and bonus elements paid in the year to the chosen date. Using the above example, this would be 16th June 2023 to 15th June 2024 inclusive. 
  3. Convert these figures to an hourly rate to calculate the gender pay gap and additional disclosures.
  4. Analyse the pay gap at the organisation level.
  5. Dive deeper into the analysis for part-time employees and those with temporary contracts.
  6. Prepare a narrative outlining the causes of identified gaps and actions to address them.
  7. Publish the report where it is available for anyone to access and read at any time within six months of the chosen date in June. For instance, if choosing 15th June 2024, the reporting deadline is 15th December 2024. 

You can read our latest blog, Understanding Irish gender pay gap reporting metrics and best practice to learn more.

What Can You Do To Prepare

With larger companies already engaged in GPG reporting for the last two years, organisations with 150-249 employees have an opportunity to learn from this experience. Such learning can be translated into actionable steps that, if followed, will help you avoid the pitfalls while realising compliance benefits. 

Actionable steps for HR in smaller companies:

  1. Leverage existing tools and resources: Look for and use tools and templates provided by regulatory bodies or industry associations. Many larger companies have shared their processes and best practices, which you can easily adapt to suit your organisation. You can also look at the reports they’ve published to get an idea of the format you should follow. 
  2. Engage stakeholders early: Involve key stakeholders, including finance and senior leadership, from the outset. This collaborative approach ensures that everyone understands the importance of GPG reporting and contributes to accurate data collection and analysis in a timely manner.
  3. Conduct regular pay audits: Implement regular internal pay audits to monitor pay disparities. This proactive measure makes collating the information quicker and helps you to identify and address gender pay gaps before the formal reporting period, ensuring a more accurate and fair reporting process.
  4. Use technology to streamline processes: Invest in HR and payroll software that automates data collection and analysis. Such tools simplify the reporting process and reduce the risk of errors. Many vendors also provide additional free resources to help you to compile your GPG report. 
  5. Provide training and education: Offer training sessions for managers on GPG reporting requirements and best practices. By educating employees, you ensure they’re better equipped to understand and contribute to the reporting process.
  6. Foster a culture of transparency: Encourage open communication about pay and compensation practices within the organisation. Transparency can help build trust among employees and facilitate the collection of accurate data for GPG reporting.
  7. Benchmark against industry standards: Compare your company’s gender pay data with industry benchmarks. This comparison helps identify areas where your company may be lagging and where improvements could be made.
  8. Create a clear reporting plan: Develop a comprehensive plan outlining the steps, timelines, and responsibilities for GPG reporting. Having a structured approach ensures that nothing is overlooked and that the reporting process runs smoothly.

By implementing these steps, smaller companies can not only comply with gender pay gap reporting requirements but also foster a more equitable and inclusive workplace. 

The Benefits of GPG Reporting

Complying with GPG reporting offers several benefits. The most obvious is avoiding the negative outcomes of non-compliance. While there isn’t a sanction for having a pay gap or failing to report, it can be costly in terms of reputational damage with both customers and employees.  

By identifying and addressing potential disparities, organisations can minimise the risk of costly pay equity lawsuits. Ensuring all employees receive fair pay also boosts internal morale and nurtures trust between employers and staff, leading to greater employee satisfaction.

Finally, organisations that comply with GPG reporting promote their commitment to equality and demonstrate a business-wide dedication to ensuring fair practice in the workplace, which can help with attracting and retaining skilled talent. 

In practice, the feedback has been overwhelmingly positive despite initial resistance from larger organisations that are already required to report. According to PwC’s report on the gender pay gap in Ireland, the mean gender pay gap across all companies surveyed decreased by 1.4%, from 12.6% to 11.2%. Sectors such as aviation and construction saw even greater improvements.

The mandatory nature of reporting has also spotlighted issues around gender representation at various levels within organisations. The data revealed that over 75% of companies reported a predominance of males in the highest pay brackets, prompting many businesses to concentrate efforts on increasing female representation in senior positions. 

However, it’s essential to recognise that not all sectors are faring equally. Industries like law, finance, and construction continue to grapple with considerable pay gaps, often linked to male-dominated senior roles and substantial bonus discrepancies. This is something to bear in mind at your organisation.

The introduction of gender pay gap reporting in Ireland has been a crucial step towards gender equality in the workplace. It has not only fostered transparency but also encouraged companies to reflect on their practices and actively work towards creating fairer working environments for all. 

As you prepare for this new requirement, there are lessons to be learned from the larger firms that have already navigated this path, setting the stage for meaningful change to the gender pay gap in Ireland.

 

What you Need to Know about the New Irish Gender Pay Gap Reporting Requirements was last modified: November 14th, 2024 by Nikki O Hagan

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