Gender pay gap reporting in Ireland – new guidance published
12 May 2022
The Department of Children, Equality, Disability, Integration and Youth has finally published some details on how employers will have to calculate their gender pay gap statistics.
The new guidance and frequently asked questions give helpful information, but the regulations setting out the detail of the reporting obligations under the Gender Pay Gap Information Act 2021 (the Regulations) have still to be published.
What will employers in Ireland have to do?
Employers will have to report:
- 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; and
- the proportion of men and women in each of four equally sized quartiles.
Employers must calculate these statistics for their employees using a snapshot date of their choice in June 2022 and using data from the preceding 12 months. The statistics listed above must be reported within six months of the snapshot date.
What’s in the gender pay gap reporting guidance?
Anyone familiar with UK gender pay gap reporting will feel an initial sense of déjà vu when reading the guidance. It appears that legislators in Ireland have been heavily inspired by the UK Regulations. For example:
- Bonus will include “payments in the form of money, vouchers, securities, securities options, or interests in securities, or, which relate to profit sharing, productivity, performance, incentive or commission”. This mirrors almost exactly Regulation 4(1) of the UK Regulations.
- The quartiles calculation appears to be the same, with men and women split into four equally sized groups (and anyone straddling two or more quartiles being allocated in a proportionately equal way).
- Hours are defined very similarly. Employers must use the contracted hours (i.e. for salaried employees), a figure derived from a 12 week average for those with variable hours, or some other figure that the employer selects. However, employers can also explicitly use the total number of actual hours worked (i.e. for waged employees where this is recorded).
- Employers must prorate bonuses. Any bonuses paid must be prorated so that the amount included is proportional to the pay period. In the UK, this means taking (roughly) 1/12th of an annual bonus payment to convert to a monthly amount. In Ireland, since calculations will be based off a full year’s period, this will mean (for example) making no changes to an annual bonus but multiplying a quarterly bonus payment by four.
Differences compared to UK gender pay gap reporting
Despite these similarities, there are some important differences for employers in Ireland to be aware of.
Although very similar to the UK definition – it includes normal pay, allowances, shift premium pay, piecework pay, sick pay, etc – there is an important difference: overtime is expressly included as “pay”. This means that all payments for all overtime must be included in the calculations. Employers will need to make sure they have a good record of all overtime hours worked as this will have to be taken into account when working out the hourly rate.
As mentioned above, employers can choose their own snapshot date, provided it is some time in June. All pay and bonus data must then cover the 12 months ending on this date (rather than just the month/fortnight/week that includes this date). This flexibility also potentially gives employers some scope on what figures they actually report. For example, if pay rises or structural changes (e.g. new acquisitions or mass redundancies) took effect during June, employers might want to calculate gaps as of 1 June and compare against 30 June after these have taken place to determine how those changes might affect their gender pay gaps.
Hourly rate calculations and the “relevant period”
Gender pay gaps must be calculated from hourly rates, and these hourly rates must be calculated from everything paid and worked in the 12 months ending on the snapshot date.
If an employee received a big promotion (for example, from a graduate/apprenticeship role to a professional one), their total pay for the 12 months might be skewed by this. Someone who went from €30k to €90k halfway through the year would end up with the same hourly rate as someone on €60k for the full year. Promotions such as this might therefore influence pay gaps.
Additionally, the guidance does not mention anything about excluding people who were on reduced pay because of leave, such as maternity leavers or the long-term sick (as is required by the UK regime). Unless the final Regulations deal with this point, these employees will affect the gaps.
Proportion receiving benefits in kind
The guidance states that benefits in kind “includes any non-cash benefit of monetary value provided to an employee. This would include the provision of a company car, voluntary health insurance, stock options, or share purchase schemes”. Employers must identify all employees who received any sort of benefit in kind and calculate the proportion of each gender receiving such benefits.
The definition of benefits in kind is broad. It is anything “non-cash”. Technically, this could mean that things like meals provided in the office might be caught. Potentially things like free tea and coffee might even be enough. This is an area where we hope the finalised Regulations can provide some clarity.
What should employers be doing?
Employers with 250 or more employees in June 2022 should now prepare for their chosen snapshot date.
These employers should determine the key stakeholders they need in the business to prepare the report. They may include:
- HR - to collect the people data;
- payroll - to provide the pay data;
- more senior level HR/ER - to understand the initiatives that can be created, or which may already exist to reduce any gaps; and
- PR/comms - to assist with writing the report.
- compile a list of all of the pay elements processed by payroll (including benefits in kind). They should ensure that they understand what they are all for and how they are used so that it will be easier to identify those within scope;
- make sure their HR data is up to date, and that they have gender data for everyone – if not, they should send a reminder to those that have not provided it asking them to do so; and
- start looking at the initiatives that they are taking to improve gender equality – they should compile a list and try to identify what results these initiatives might have achieved. There is research showing initiatives that improve gender equality, which are supported by evidence and information on those that are not. Employers should consider whether they might start doing more of the initiatives that work and less of those that don’t.
The best way to identify causes of gaps is to gather additional data on job title, department, grade and drill down, calculating a variety of other statistics. This can help to build a picture of the biggest contributors to gaps and identify the target areas for change. Employers should consider what possible categories of data are available for doing more granular analysis.