Gender pay gap reporting is finally here.
If you’ve been listening to the national airwaves recently, you’ll have heard public service announcements informing companies that December 2022 is the deadline to submit their first yearly report.
Currently, the reporting requirement only applies to companies with more than 250 employees. But from 2024, companies with more than 150 employees will also be required to publish details.
And in 2025, organisations with more than 50 employees will also fall under the remit.
Initially, companies only have to publish the findings on their websites or in some other way that is accessible to employees and the public.
However, from 2023 onwards, there are plans to develop an online portal, which will make it easier to compare data across business sectors, regions and so on.
This article outlines what’s involved in preparing a gender pay gap report.
It covers the following:
- Why is there a need for a gender pay gap report?
- Has it worked in other countries?
- Data that employers need to report on
- Actions to take to reduce the gender pay gap
- What if your company fails to publish the report or is late in publishing?
- What if an employee doesn’t identify as either male or female?
- How to approach reporting requirements
- Irish companies that already publish gender pay gap data
- Final thoughts
Why is there a need for a gender pay gap report?
The gender pay gap refers to the difference between what is earned on average by women and men based on average gross hourly earnings and not just men and women doing the same job, or with the same experience or working pattern.
It goes beyond looking at equal pay for equal work, which is a principle that has been enshrined in Irish law since the 1970s through its membership of the European Union.
By going a step further and introducing gender pay transparency, it’s hoped more progress will be made on gender equality in the work place.
Currently, according to 2018 data from Eurostat, the pay gap in Ireland is 11.3%. However, other sources have estimated the gap to be as large as 14%.
The reasons for the gap are complicated and vary across age profiles, industrial sectors and occupations.
The gap is also reflective of differences in working patterns between men and women, largely due to women continuing to do much more unpaid labour in terms of child and elder care and housework.
Also, there are certain other trends.
The pay gap is higher in the private sector, and higher as people progress through their careers. In addition, sectors dominated by women often have lower pay, are more precarious and offer fewer opportunities for advancement, partly due to the undervaluing of women’s work.
Has it worked in other countries?
Gender pay gap reporting was introduced in the UK in 2017 and the construction and financial sectors were found to have the largest gap overall.
In addition, 78% of organisations had a gender pay gap and the majority of higher-paid jobs were held by men. And men were also paid higher bonuses than women.
Since its introduction in the UK, the pay gap has been declining slowly and in 2022, the gap among full-time employees was 8.3% (it was 9.0% in April 2019).
Data that employers need to report on
Employers need to calculate the data for their employees using a snapshot date, and the data has to come from the preceding 12 months.
Data to report on
- The differences between the mean and median hourly pay of male and female employees
- The differences between the mean and median bonus pay of male and female employees
- The differences between the mean and median pay of part-time male and female employees
- The differences between the mean and median pay of employees on temporary contracts.
You also need to report the percentage of men and women who:
- Received bonuses
- Received benefits-in-kind
- Are in the lower, lower-middle, upper-middle and upper range pay bands
More details can be found on the government’s website.
Companies were required to choose a snapshot day in June 2022 on which to base their hourly pay rates of employees, with the reporting period being the prior 12 months.
So, for instance, if the snapshot date for your company was 15 June 2022, the reporting period will be 16 June 2021 to 15 June 2022.
Then in terms of publication, you’re obliged to publish the findings six months on from the corresponding snapshot date, which in the example discussed above would be 15 December 2022.
Actions to take to reduce the gender pay gap
A key aspect of the regulations is that if there is a pay gap, you need to outline why and highlight the measures your company intends to take to close it.
These actions should be specific, meaningful and measurable.
Measures could, for example, include examining recruitment processes as well as bonus schemes, designing talent development that encourages women to progress, or offering more family friendly working conditions.
What if your company fails to publish the report or is late in publishing?
If your company doesn’t comply with the reporting requirements, the Irish Human Rights and Equality Commission will have the power to make an application to the Circuit Court or to the High Court for the granting of an order requiring your company to comply.
In addition, employees are allowed to inform the Director General of the Workplace Relations Commission.
What if an employee doesn’t identify as either male or female?
In situations where a certain employee does not self-identify as either gender, your company may omit the individual from the pay gap calculations.
However, you need to be mindful to the sensitivities of gender and no employee should be singled out or questioned about their gender.
How to approach reporting requirements
“There is a lot of data required and I think companies are underestimating the work involved,” explains Dave Hickey, head of business development at Galway-based accountancy practice DHKN.
He also believes that companies might have to go further in terms of extrapolating data, in order to be able to understand the story behind the figures.
He gives an example in terms of how to treat overtime.
“While the guidelines say ordinary pay should include overtime, that figure may need to be separated, because that might be a reason for a pay gap,” says Dave.
“For while there may be no gap for standard pay, once overtime is included that perhaps is paid at a higher rate, then a significant gender pay gap may emerge.”
In addition, Dave says other factors should be considered, such as how long employees have been with the company or how long they’ve been working within a particular pay grade.
The depth of analysis needed will depend on the business, with some companies having very straightforward systems in terms of pay, and others, not so.
He also stresses that this isn’t just a job for one team, such as HR and payroll, as all stakeholders need to be included, including PR and comms teams, and senior management.
Dave adds: “So, if it is a big organisation, you need to make sure that department heads are involved, because they’re the people who will be able to explain a pay gap better than the payroll department or even the finance department.
“Therefore, involving them is crucial, and particularly when considering how to communicate regarding a pay gap.”
Irish companies that already publish gender pay gap data
Certain Irish companies have been ahead of the game and have been reporting statistics for several years. Companies include An Post, professional services firm PwC, Bank of Ireland and ESB.
In fact, An Post has become one of the first big companies in Ireland to eliminate its pay gap.
Over the past two years, the company has reduced the gap from 3.7% to effectively 0%. It has also achieved significant progress in balancing representation across the business.
There’s now a 50:50 balance on its management board and female representation in the senior management group is now 41%, up from 33% the previous year.
To achieve this, An Post implemented several initiatives to help close the gap, including having 50:50 shortlists when interviewing for senior management roles.
It has also set up a female talent programme called Aspire and 19% of its participants have moved jobs within An Post since completing the programme and 74% have gone on to further education.
“It is not just about gender pay, it is about equality and diversity, it is part of our programme to provide decent work for all,” said CEO David McRedmond on the release of this year’s report.
And he highlighted that companies that are more diverse are better companies and make better decisions.
By 2025, most companies in Ireland will be obliged to publish data. So, even if your company is not required to publish statistics just yet, you should start collating data and making sure that it is accurate and will stand up to scrutiny.
Your data, and the ability to measure it, needs to be in place 18 months before reporting, so it pays to start taking action now.
As Dave points out, with the new year approaching, this is an ideal time.
He says: “For the next tranche of companies. you should start thinking about this now, because as we’re coming into January, when you’re starting typically on a new payroll, this would be a good time to start reanalysing and reorganising your payroll reports, so that it will produce the required data when needed.”
And you need to understand the underlying reasons for any pay gap, because effective communication will be key.
In particular, your company will need a clear action plan on how to close any gap.
If it’s ambiguous or vague, it could lead to negative attention for your company – and even more critical, it could cause tension among your employees.
Recommended Next Read
Payroll compliance: 10 tips to get it right every time
The A to Z of payroll
Learn about the key terms and concepts that will help you to manage the complexities of payroll systems effectively, and to confidently meet compliance requirements.
Subscribe to the Sage Advice newsletter
Join 1.5 million subscribers and get the best business admin strategies and tactics, as well as actionable advice to help your company thrive, in your inbox every month.