Gender Pay Gap Reporting legislation has recently been signed into law in the form of the Gender Pay Gap Information Act 2021 (the “Act”), however, the detail of the mechanics of when and how the information will need to be reported is as yet unknown. In this regard, the regulations to give effect to the Act (the “Regulations”) are eagerly awaited. In this update, Aoife Newton of our Legal Services team sets out the main provisions of the Act to assist employers get familiar with the categories of information which will need to be reported on, get their data ready, and possibly rectify pay gaps ahead of the reporting deadlines.
The Act amends the Employment Equality Act 1998 by requiring Regulations to be made by the Minister for Children, Equality, Disability, Integration and Youth (the “Minister”) as soon as reasonably practicable after the commencement of the legislation. The Regulations will place reporting and publication obligations on private and public sector employers with regard to their gender pay gap and will contain much of the detail on the practicalities of the legislation.
The legislation will not apply to all employers. Only employers who satisfy certain employee thresholds will be considered in scope of the legislation and required to report and publish this information. Where it is reported by an applicable employer that a gender pay gap exists, the employer will be required to (a) explain why the gender pay gap exists; and (b) detail the measures being implemented by the employer to reduce or eliminate the gender pay gap.
Both private and public employers will be affected by the mandatory reporting obligations.
The mandatory reporting obligations will initially only apply to employers with 250 or more employees for up to two years after the commencement of the Regulations. The scope of the mandatory reporting obligations will then widen further to include employers with 150 or more employees on or after the second anniversary of the Regulations and those with 50 or more employees on or after the third anniversary of the Regulations.
Employers with less than 50 employees will not be required to report on their gender pay gap.
Employers identified above as being within the scope of the Regulations will be required to report on the difference in remuneration between male and female employees, as more particularly set out below:
Employers will also be required to simultaneously publish the reasons for differences in pay in the context of the above and the measures (if any) being taken, or proposed to be taken, by the employer to eliminate or reduce such differences in the employer’s case.
In addition to the mandatory reporting requirements above, other requirements may be contained in the Regulations once published including the following:
The information will not be required to be published more than once per year.
An aggrieved employee may make a complaint to the Workplace Relations Commission (“WRC”). On receipt of a complaint, the WRC shall investigate the merits of the complaint and may order the employer to take a specified course of action to ensure compliance with its gender pay gap reporting obligations. The WRC does not have the jurisdiction to order the employer to pay compensation to an employee or to impose a fine on an employer.
The Act provides for the Irish Human Rights and Equality Commission (“IHREC”) to apply to the Circuit Court or High Court seeking an order forcing an employer to comply with its reporting obligations, where in the view of IHREC, an employer has not complied with its obligations to publish its gender pay gap information and reasonable grounds exist to seek an order to ensure such compliance with the legislation. Employers who do not comply with such a court order may be held in contempt of court.
The Act also provides that the IHREC, on receipt of a request from the Minister, can carry out, (or invite a particular undertaking, group of undertakings or the undertakings making up a particular industry or sector to carry out) an equality review or create and action an equality action plan.
The Minister has confirmed that it is intended to have the Regulations in force by the end of 2021.
The Minister has said that the “direct way in which the employer will be expected to report and engage on an annual basis will be set out clearly within the regulations” and has indicated that it is likely to be through a central website onto which employers will be required to upload their information.
On the basis that it is intended to have the Regulations in force by the end of this year, we can expect that the legislation will apply from some date in 2022 to applicable employers. Employers can prepare by collating and analysing their remuneration data in order to assess whether and to what extent gender pay gaps exist and begin advanced planning now for how to remove or reduce any such gaps before they are publicly obliged to report on the gaps, the reasons for them and what they are going to do about the gaps.
KPMG can assist in preparing and analysing your data and can guide your organisation through the results of your data analysis to ensure that you can explain and rectify any gender pay gaps where possible. Please contact the KPMG Employment Law team for further information.