For Irish lawmakers, commitment to promoting diversity, equity and inclusion (DEI) continues to be a top priority in 2023. Following the introduction of Ireland’s Gender Pay Gap Information Act (the Act) in 2021, employers continue to be required to report their gender pay gap metrics as a tangible commitment to DEI.
On May 31, 2022, regulations went into effect requiring organizations with more than 250 employees to report their gender pay gap information in December 2022, based on a June 2022 snapshot of the organizations’ employees.
As previously reported, to comply with the Act, employers are required to publish the following information:
- The mean and median hourly remuneration for male and female employees;
- The mean and median hourly remuneration of part-time and temporary male and female employees;
- The mean and median bonus remuneration of male and female employees;
- The percentage of male and female employees who received bonus remuneration;
- The percentage of male and female employees who received benefits in kind;
- The proportion of male and female employees who fall within the lower, lower-middle, upper-middle, and upper quartile pay bands; and
- The employer’s statement explaining the reasons for the differences relating to remuneration that are due to gender and the proposed or implemented measures to eliminate or reduce such differences.
This year, as the second year in effect for employers with more than 250 employees, the 2023 snapshot data will be compared to and assessed against the measures each organization committed to implementing in its 2022 statement. As such, employers should begin implementing solutions to narrow any gaps identified in their 2022 data prior to the June 2023 snapshot date. Indeed, media coverage of the gender pay gap data is expected to be more scrupulous following the 2023 data due to the addition of a benchmark against which the progress of organizations will be assessed.
Employers with 150-250 employees or 50-150 employees are not required to comply with the Act until 2024 and 2025, respectively. It is anticipated, however, that some high-profile employers within these thresholds will opt to publish their data prior to their required year in an effort demonstrate a commitment to DEI. Early publication by these employers is likely to put pressure on employers of similar size or in similar sectors to volunteer their data at an earlier stage than legally required. Thus, employers of all sizes should be aware of the requirements for reporting and consider taking initial preparatory steps so that they can be ready to fulfill their 2023 obligations when appropriate. Early preparation and early publication may be doubly beneficial because it would permit employers to utilize positive data to attract and retain key female talent.
The Department for Children, Equality, Disability, Integration and Youth has published FAQ guidance for employers seeking additional information.
Though failure to report or comply with reporting requirements will not lead to any financial penalties, the Act does empower the Irish Human Rights and Equality Commission (IHREC) to seek orders for compliance in the civil courts. Employees also may file complaints with the Workplace Relations Commission (WRC), which will be able to investigate and order the employer to comply with the Act. More importantly, however, employers who fail to comply or who report significant gender pay gaps will likely face reputational harm.
The European Union is also taking steps to further DEI initiatives. In December 2022, a political agreement was reached between the European Parliament and the Council on the Directive on Pay Transparency Measures. Like Ireland’s gender pay gap laws, the EU Pay Transparency Directive (the Directive) lays out the foundation for mandatory gender pay gap reporting for certain employers across member states. The aim of the Directive is to promote greater pay transparency for applicants and employees, to reduce the pay gap within the EU and to provide effective enforcement of the equal pay principle between genders.
Under the Directive, employers will be required to provide initial pay information prior to the job interview, make a description of the gender-neutral pay and career progression criteria available and permit employees to request information regarding their individual pay level and average pay levels for their role. The Directive also provides certain provisions laying out paths to restitution for victims of pay discrimination.
Because the Directive introduces significant pay transparency obligations, employers will need to ensure they are meeting each obligation to avoid exposing themselves to equal pay claims, grievances, broader employee relations issues or negative press. Employers also should bear in mind that, once implemented, it is possible that EU level requirements set forth by the Directive could affect the gender pay gap data requirements applicable under Irish regulations.
Finally, in November 2022, the European Parliament adopted the EU Gender Balance Directive, seeking to impose targets for gender representation on the boards of large EU-listed companies. By 2026, listed companies will need to have at least 40 percent of the underrepresented sex among non-executive directors or 33 percent among all directors. Listed companies also will be required to report the measures taken to achieve their target if the objectives have not been met.
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