In this article, we look at recent updates to the Irish legislation, the changes coming down the tracks at an EU level, and what employers can do now to best prepare themselves to meet their obligations.

Gender pay gap reporting

The Irish gender pay gap reporting regulations (the “Regulations”) require employers to report their gender pay gap under a number of headings each year, along with the measures that are being taken to eliminate or reduce the gap. The key gender pay gap statistics employers are required to report on include:

• mean and median pay gaps;
• mean and median bonus gaps;
• the proportion of men and women that received bonuses;
• the proportion of men and women that received benefits in kind (‘BIK’) ; and
• the proportion of men and women in each of four equally sized quartiles.

The Regulations set out in detail the process for calculating the data required for the reports and they are supplemented by a Guidance Note on “How to calculate gender pay gap metrics” and “FAQs for employers”, both published by the Irish Government.

When announcing the launch of the new online central reporting portal (which is expected to be launched in the Autumn), the Minister for Children, Disability and Equality also indicated that the reporting deadline this year will be in November, and not in December as was the case in previous years.  Employers will, therefore, be required to gather their gender pay gap data on a ‘snapshot’ date in June (which can be any date in June that an employer chooses), and to publish those results within five months, by the end of November.

With this being the fourth year of gender pay gap reporting in Ireland, the focus on eliminating, or at least reducing, any gender pay gaps found, is becoming increasingly challenging year on year for many in-scope employers.

Updates to the Gender Pay Gap Regulations

The Regulations were updated with effect from 31 May 2024, and provide some helpful clarifications for employers on several matters, such as the calculation of an employee’s working hours, what’s included in the definition of Basic Pay and how to treat payments made to employees while they are on adoptive, maternity, paternity and parent’s leave. The updated Regulations also mark a shift in approach to how share options are treated for gender pay gap calculations, with these now included in the benefit in kind calculations rather than under bonus remuneration.

We expect to see further amendments to the Regulations soon to require employers to publish their reports on the new central reporting portal when it is launched later this year, and to bring the shorter reporting deadline of November into force. 

What further changes are coming down the line?

The EU Pay Transparency Directive

There has been much publicity recently around the EU Pay Transparency Directive. While this was passed at EU level in June 2023, Ireland and other EU member states have until 7 June 2026 before it must be implemented. At this stage, this likely leaves only one pay review cycle for most employers before implementation. However, the Directive's stricter and more demanding requirements are already prompting changes in recruitment processes, salary structures and promotion policies.

While much of the focus of the Directive has been its impact on gender pay reporting, the obligations and potential implications extend far beyond this. Alongside requiring employers to report in far more detail on gender pay disparities, it also grants employees important new rights to information about pay.

What’s more, while the gender pay gap reporting requirements only apply to employers above certain headcount thresholds, some of the new rights that employees have around pay information will, for the most part, apply to all employers, whatever their size.

What does the Pay Transparency Directive mean for gender pay reporting?

The Directive imposes far-reaching changes to the nature of data to be reported on and once implemented here, it will require employers to report on gender pay gaps between “categories of workers” broken down by basic and variable pay. Categorising employees in this way could potentially be a complex task in terms of addressing internal job scales/structures.

The Directive also introduces important changes to the consequences arising from reporting and imposes more onerous obligations on employers. For instance, where there is a gender pay gap of 5% or more between male and female workers in a category, and this cannot be objectively justified on a gender-neutral basis, and the unjustified difference has not been rectified within six months, it triggers a “joint pay assessment”. This will require the employer to cooperate with worker representatives to analyse the pay differences, the reasons behind them, and the effectiveness of measures to address the differences. The employer must also remedy the differences within a “reasonable” period.

The Directive will also require the accuracy of pay gaps to be confirmed by an employer’s management, with employee representatives being given an opportunity to interrogate the methodology used. As such we can expect to see a bigger role for employee representatives in the reporting process overall.

Other pay information obligations

The Directive contains other pay transparency measures, the focus of which is on allowing employees to have more information about pay, both before and during employment and which will apply to all employers regardless of size. The new rights for employees include:

• Pay transparency for job-seekers - in job vacancy notices or before job interviews, employers will have to disclose the initial pay level or range for the position.

• Ban on asking about pay history - employers will be prohibited from asking job candidates about their pay history, including their existing salary.

• Right to pay information for employees - employees will have the right to request information from their employer on their individual pay level and on the average pay levels, broken down by gender, for categories of workers doing the same work or work of equal value. This right will exist for all workers, irrespective of the size of the employer. This information must be supplied by the employer within two months of the request. This is directly aimed at one of the major obstacles to enforcing equal pay between men and women: the lack of knowledge about what others doing comparable jobs are paid.

• No ban on pay disclosures - employees should not be prevented from disclosing their pay to others for the purpose of enforcing the principle of equal pay, and clauses which prohibit employees from this type of disclosure will no longer be permitted.

While Ireland has not had a particularly high number of equal pay claims, these new measures under the Directive could make it easier for employees to bring a claim as they will have the right to receive more pay information.

Proposals for draft legislation implementing parts of the Directive

On 15 January 2025, the Irish Government published a General Scheme of the Equality (Miscellaneous Provisions) Bill 2024 which includes two provisions aimed at enhancing transparency prior to employment and transposing Article 5 of the EU Pay Transparency Directive (“Directive”).

Measures in relation to job advertising

The first measure proposed in the Bill requires employers to provide information about remuneration levels or ranges in job advertisements. This goes slightly further than the Directive, which does not state that this information must be published on the advert, but it is something that a candidate is entitled to ask for at any stage during the recruitment process.

It is still not clear exactly how detailed the information on pay range will need to be, but we expect as this draft Bill progresses, it will ensure that employers cannot circumvent this new requirement by, for example, publishing very broad remuneration ranges.

Measures in relation to pay history

The second measure proposed in the draft Bill to improve pay transparency is that employers are prohibited from inquiring about job applicants’ previous pay or their current pay rates, in accordance with the Directive.  This measure aims to prevent employers from continuing a practice which results in pay discrimination (even where it may have started elsewhere). At present, employers may inquire about an applicant’s current pay and base their offer on the information provided. However, if an applicant is a woman who faced pay discrimination in her previous job, this method would perpetuate the disparity in the new role. This new measure seeks to prevent this from happening.

What’s next?

The draft Bill appears in the Irish government’s updated legislation programme for Summer 2025 under the priority drafting section of the programme. It remains to be seen how this Bill progresses. It is possible we may see further initiatives, or variations of the draft Bill aimed at implementing the Directive.

Proposals across Europe

Some EU member states have published their proposals on the implementation of the Directive with varied approaches. It is important for employers with operations in different countries to keep on top of the differences in proposals in each member state.

Conclusion

With the reduced thresholds for reporting this year, many more employers than ever before need to prepare for gender pay gap reporting. Now is also the time for employers to start identifying and exploring any pay gaps and areas where they could be exposed before the information required by the Directive is opened up to greater scrutiny.

For further information on the Pay Transparency Directive, please see:

• Lewis Silkin - Pay Transparency Directive: What is a Joint Pay Assessment?
  
• Lewis Silkin - Pay Transparency Directive: how will gender pay gap reporting in Ireland need to change?
• Lewis Silkin - Pay Transparency Directive new employee rights to pay information
  
• Lewis Silkin - Pay Transparency Directive Service