The countdown to new legislation requiring big companies to report gender pay gaps has begun, but the focus remains one-dimensional and the clear basis for change it represents needs more appreciation.
From December, many Irish employers will not only have to report whether there is a gender pay gap in their company, but also why it exists and what they intend to do about it. In this respect it goes further than the UK legislation on which it is modeled.
The law, which initially applies to companies with more than 250 employees, requires annual reporting on the proportion of male and female full-time employees,
Part-time and temporary work and their relative pay across a range of headings, including hourly wages, benefits in kind and bonuses. The aim is to determine whether there is a gender pay gap in individual organisations.
So far, the main focus has been on the challenges employers face in compiling and reporting this data through December. This is understandable given the relatively short lead time, but has meant that insufficient attention is paid to a critical aspect of the legislation – namely the additional requirement to explain the reasons for any gender pay gap and the measures taken to eliminate them.
As is evident from other countries, the disclosed data will not be positive for most employers. In the last year of full reporting in the UK, 78 per cent of employers reported a gender pay gap. There is little reason to believe that Ireland will be any different.
However, rather than trying to hide behind negative data or deny its existence, employers should treat the data as it is – a snapshot whose seeds were likely sown years ago. A gender pay gap that is now emerging is a function of a multitude of different actions and decisions that have led to this point – both individually and societally.
Gender pay data does not include data on female employees who have left an organization, possibly due to lack of opportunity for advancement or incompatibility with, for example, family responsibilities. Likewise, data is not collected from employees who did not join this organization at all, whether due to gender expectations of what a “male job” is, hiring bias, or a workplace culture that feels off-putting or even hostile.
What it captures is the result of those actions and decisions. The lack of female representation at higher levels. The higher percentage of dropouts. The disproportionate number in part-time “family-friendly” roles. All of this is reflected in the data on the gender pay gap. However, these are also the means by which employers can bring about change.
By attempting to address some or all of these issues, employers can make progress. It won’t be easy – there is no silver bullet. For example, more sharing of childcare responsibilities is often presented as a solution, with the Nordic countries cited as examples. However, the average gender pay gap in these countries is higher than in Ireland, mainly because male workers are over-represented in more lucrative occupations.
Although the subject is complex, Irish employers can learn from other jurisdictions – for example, evidence-based advice can be found in a recent UK Equality Office report on narrowing the gender pay gap. The key is to try to identify the particular levers that work best for a particular organization and then apply them in practice.
As gender pay reporting becomes more mainstream, there will inevitably be an impact. In the UK, it is already affecting procurement processes, with many companies proactively disclosing data on gender pay and diversity, even when not required by law.
The potential reputational impact of getting this wrong was highlighted on International Women’s Day when a UK Twitter account went viral, highlighting the discrepancy between smug tweets from companies celebrating their female employees and the amounts that these employees received in relation to male colleagues. workforce. The reality is that employers are held accountable.
By requiring employers to disclose why there is a gender pay gap and what they intend to do about it, the new legislation ensures that the issue cannot be ignored. Over time, it will become clear which companies are serious about taking action to eliminate existing wage differentials and which are not.
While it may be difficult to answer this question, this is an issue employers cannot ignore. Not only do they have to think about how they collect the information, but also how they explain when they fall short and how they will change that in the future.
:: Niall Pelly is a partner and head of the Dublin office of global employment law firm GQ Littler
https://www.independent.ie/business/irish/employers-need-a-plan-of-action-for-addressing-the-causes-of-gender-pay-gap-41539993.html Employers need an action plan to address the root causes of the gender pay gap