Gender pay gap reporting in Ireland: why smaller employers should do a dry run NOW
25 May 2023
Smaller employers in Ireland will start to have gender pay gap reporting obligations in 2024. This means that there is only a small window of opportunity to tackle pay gaps and take action on gender diversity, without the fear of having to publicly report potentially uncomfortable statistics.
Last year, employers in Ireland with 250 or more employees reported their gender pay gap statistics for the first time. Next year, the threshold for reporting drops to 150 employees. From June 2025, employers with just 50 employees will have to comply.
In this article, we explain why smaller employers should do a dry run and calculate gender pay gap statistics this year.
Greater certainty about who/what to include in gender pay gap reporting
Gender pay gap reporting came into force in Ireland last summer. It proved tricky for many employers, with government guidance and FAQs being regularly amended. But now that the dust has settled, and some of the trickier legal issues have been addressed , it should be easier for smaller employers to understand how to properly calculate and report their gaps. Although there remain a few quirks and grey areas, the legal position is more certain.
Establish your gender pay gap reporting processes early
Gender pay gap reporting often requires the input of various stakeholders in the business including legal, HR, rewards, comms and senior management. Data may need to be compiled from various different sources (typically this involves splicing payroll information with data from HR systems).
Last year, many employers struggled to identify who had the data they needed, how it could be consolidated into a sensible and useful form, and who the key stakeholders were in their business. Making an early start by doing a dry run means that all these potential issues can be identified and considered in good time.
Voluntarily report good gender pay gap statistics
Voluntarily reporting is also a clear and positive signal to your workforce that you are committed to reviewing and acting on gender equality in your business. By deciding to voluntarily report, rather than only reporting when legally obligated, the story that you tell differs.
If gender pay gap statistics are good, and they are likely to remain that way, you could start to report them. Doing a dry run will help you identify the scale of the gender pay gap issue (or opportunity) that sits before you.
Identify the causes of gender pay gaps
Gender pay gaps are notoriously difficult to reduce, and it certainly doesn’t happen quickly. It is not simply a case of paying women more, but instead it is about identifying areas where women are over/underrepresented in the business and then taking action to create a more balanced workforce.
This might include hiring more women into senior or technical roles, or more men into traditionally female dominated lower paid roles. By doing an early deep dive into the data (and understanding the particular issues that can affect small businesses), you can identify the target areas for change, what degree of change is needed to achieve reductions in gaps, and then identify the potential timescales involved. It will help you to focus your precious resources in the right places.
Optimise compensation for gender pay gap reporting
With gender pay gap reporting, the devil is in the detail. Whether something is “pay” or “bonus” is not always clear, and the way in which you treat different sorts of rewards and benefits can affect how they are included for gender pay gap reporting purposes.
For example, a company car worth €6,000 would not affect the pay gap statistics but a monthly car allowance of €500 would. In both cases, an employee would be receiving the same thing (a car or equivalent worth €6,000), yet they would contribute differently towards the gaps. The former would only affect the proportion of men and women receiving a benefit in kind, but the latter is considered “pay” under the gender pay gap Regulations and so must be included when working out the mean and median pay gaps.
For a small company that is yet to hit the reporting threshold, it is worth going through all pay elements and determining how they fall into the legal definitions. If any might seem potentially problematic, there is still an opportunity to make changes.
Consider the impact of self-employed contractors
The definition of “employee” under the Regulations is broad. It potentially includes self-employed contractors. Someone engaged to provide services personally to an employer is likely to have to be included. However, where contractors are engaged via a personal services company (rather than directly), they may not fall within the calculations. Doing a dry run means that you can identify whether the category of people engaged to do work for your business is likely to impact your gender pay gap reporting.
More years of gender pay gap statistics gives a better idea of trends
With more data points, you can better identify in which direction your gaps are going. Perhaps they are falling already, suggesting that whatever initiatives you have in place are the right ones. But maybe they are stagnating or, even worse, going up.
Doing a dry run this year means that you get the benefit of an extra data point. When analysing your gender pay gaps next year, or, in the case of an employer with 50-150 employees, in 2025, you will have a much better idea of the scale of the challenge ahead. This will affect the tone and overall story of your report – whether you are telling employees that there is a big problem and you need to figure out what to do, or whether you are saying that you have a clear understanding of the problems and then explaining the targeted initiatives in place to deal with them (and the impact of these initiatives so far).
We offer a complete gender pay gap reporting service that is trusted by dozens of big employers across Ireland. Find out more about how we can help.
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