The regulations, together with the guidance notes and FAQs for employers published by the Government earlier last month, shed much needed light on the obligations of employers.
For example, the regulations now confirm that:
- employers will be required to publish gender pay gap information relating to those employees on temporary contracts; and
- disclosures by job classification will not be required
However, there are aspects where the regulations and the guidance are not fully aligned and where further clarification will be required from the Government. These include:
- the treatment of paid leave, such as sick leave and maternity leave; and
- the treatment of a bonus where the bonus period and the reporting period for gender pay gap purposes are not aligned.
Definition of employer or employee
For the purpose of gender pay gap reporting, the definition of employer and employee will be based on definitions within the Employment Equality Act 1998. Both definitions are based on the existence of a contract of employment.
Snapshot date
Gender pay gap calculations are based on employer payroll data drawn from a specific date each year. This specific date is called the 'snapshot date'. The regulations confirm that employers must choose a snapshot date in the month of June 2022.
Calculating the gender pay gap
The methodology to be used to calculate an organisation's gender pay gap can be summarised as follows:
- identify all employees as at the chosen snapshot date
- collate sufficient data to calculate all ordinary pay and bonus elements paid over the prior year
- convert these amounts to an hourly rate and calculate the gender pay gap and other disclosures
- analyse the pay gap at entity level
- conduct further analysis for part-time employees and those with temporary contracts
- prepare a narrative outlining the causes of any gender pay gap and any actions being taken to address it
This methodology aligns more closely with the Pay Transparency Directive (which is progressing at European level) than with the UK's gender pay gap legislation. The Irish legislation differs from the UK's requirements in the following ways:
- Irish employers have just six months to report from the snapshot date
- Irish employers must analyse 12 months of pay data, rather than just one month of pay data
- there are more extensive disclosure requirements for Irish employers (e.g. the inclusion of part-timers and those on temporary contracts, and the obligation to report the percentage of employees receiving benefits-in-kind, the causes of the gender pay gap and the actions being taken to address that gap)
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.
Reporting date
The reporting date will be the same date in December 2022 as the snapshot date. If an employer chooses a snapshot date of 8 June, the relevant reporting date will be 8 December. This means that employers have six months from the snapshot date to calculate and report their gender pay gap figure. Employers should consider their communications strategy (either internal or external) in advance of the reporting date.
Reporting systems
Employers must publish their organisation's gender pay gap on their website by the relevant date in December 2022. An online reporting system is expected to be in place at the next reporting date.
The three key actions to take now
To prepare for gender pay gap reporting, employers should ask themselves the following three questions:
- Do you understand what must be reported?
- Can your systems easily produce the relevant statistical data?
- Do you need support to either calculate or validate your gender pay gap, analyse its root causes, or identify why certain groups of staff are especially affected?
We are here to help you
Gender pay gap reporting will be a challenge for Irish employers, particularly in the first years of its implementation. Many expect that the first reporting results will not be positive for a large number of companies. However, it will provide them with an opportunity to review policies and strategies, consider the challenges, and take the necessary actions to close the gap in the coming years.
Our team can help you every step of the way. Contact us today.