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Recently published regulations provide clarity on aspects of gender pay gap reporting obligations. This follows the Gender Pay Gap Information Act 2021, which was signed into law in July 2021.
The regulations give clarity on the following key areas:
In particular, the regulations confirm that disclosures by job classification will not be required.
However, there are aspects where the regulations and recently published guidance are not fully aligned. Further clarification is therefore required from Government, including:
Employers with more than 250 employees now have six months to calculate and disclose their gender pay gap. The regulations confirm that employers must choose a ‘snapshot’ date in June 2022 when gender pay gap calculations are based on their payroll data, and report six months from this date.
The legislation requires an explanation of the causes of any gender pay gap and employers must report on any actions being taken to address it. Employers should also consider their communication strategy in advance of the reporting date.
The methodology for Ireland aligns more closely with that of the Pay Transparency Directive, which is progressing at European level, than with the UK’s gender pay gap legislation. The Irish requirements differ from the UK’s requirements in the following key areas:
Consequently, employers who have pre-prepared calculations mirroring the UK legislation and methodology should now consider re-running their workings to reflect these key differences between UK and Irish legislation.
Employers really need to ask themselves some fundamental questions. For example:
Doone O’Doherty, Partner at PwC Ireland, commented: “Gender pay gap calculations are complex and, despite the regulations and Government guidance, some more clarity is still needed. Reporting will still be a challenge for many Irish employers, particularly in the first years of its implementation. Many expect that the first reporting results will not necessarily be positive for a large number of companies. However, it will provide them with an opportunity to review policies and strategies, consider the challenges faced and actions required to ensure that the gap closes in the coming years.
“Effective actions are needed by businesses and policymakers to achieve greater gender equality in workplaces. One of the key drivers of the gender pay gap is fewer women in senior roles. To create a strong pipeline of female talent, organisations need to identify and remove barriers to entry—and progression—for women at all levels. Analysing recruitment and promotion data with a gender lens will help identify where in the process issues are occurring—at the attraction, shortlisting or selection stages—and inform actions. Embedding inclusion throughout the organisation’s HR policies is a further step to support the attraction and retention of key female talent. This may mean greater flexible working options at senior levels, equal paid parental leave or a menopause policy to retain more experienced women.
“The new gender pay gap regulations are a welcome development in helping to ensure that pay transparency exists in organisations as Ireland progresses on a journey towards gender equality in the workplace.”
The PwC 2022 Women in Work Index, which assesses women’s employment outcomes across 33 OECD countries, found that the rewards from accelerating progress towards gender equality could be significant. PwC’s analysis finds that increasing women’s employment across the OECD could boost OECD gross domestic product (GDP) by US$6 trillion per annum. Meanwhile, closing the gender pay gap could boost women’s earnings across the OECD by US$2 trillion per annum.
PwC’s analysis finds that increasing women’s employment in Ireland could boost Irish GDP by US$56 billion per annum or 12%. At the same time, closing the gender pay gap could boost women’s earnings in Ireland by US$3.95 billion per annum or 8%.
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