Blog: Employers will soon have to publish pay equality reports – acting now will diffuse grievances

Ciara McLoughlin
Ciara McLoughlin

Ciara McLoughlin, partner in A&L Goodbody’s employment group, writes on the controversy surrounding the publication of BBC salaries earlier this month.

This month, the BBC published the salaries of its TV presenters and radio broadcasters earning more than £150,000 (€168,000) a year. Akin to many other industries, the figures revealed a significant pay disparity between male and female employees.

In the days that have followed, there has been criticism and scrutiny of the broadcasting organisation’s gender pay gap (GPG), which has, in turn, sparked speculation about RTÉ’s potential GPG and a much wider debate on the lack of pay equality in Ireland.

Sharing employees’ salaries publicly is aligned with a much wider trend gaining momentum both in Ireland and internationally, which is seeing increasing pressure on employers to be more transparent in their payment practices. However, in the context of this debate, it is important not to confuse the GPG with the concept of equal pay for equal work. The existence of a GPG does not necessarily mean women are not receiving equal pay. It is a measure of whether women are represented evenly across an organisation, in particular whether they are represented among the higher earning positions in an organisation.

Accordingly, a GPG is not necessarily evidence of discrimination. It serves to illustrate a problem, a discrepancy. Statistics have shown that women tend to outperform men at school, at third-level education and often at work.

However, women are coming up against barriers to keeping pace with men on the career ladder, with a knock-on effect on their pay. Some barriers will be self-selected, some are societal and cultural and some are from the employer – conscious or unconscious.

An evident GPG could be characterised as a measure of the impact of those barriers in practice. Revealing this impact (ie the gap between men and women’s pay) will allow and encourage employers to seek to identify and address those barriers.

So what is happening in Ireland? In May, Labour senators in the Seanad tabled the Gender Pay Gap Information Bill 2017 which would require medium to large-sized companies to regularly publish wage transparency surveys that highlight any difference in pay between their male and female employees. The bill was supported by the trade union Impact which, along with the Labour Party, has been actively campaigning on this issue.

In the UK, new regulations on public mandatory GPG reporting came into force in April. Now, UK employers with more than 250 employees are required to publish annual gender pay and bonus figures on their website for three years, in addition to the information being uploaded to a government website.

The Irish Government – which included a commitment to take “measures to reduce the gender pay gap” in its Programme for Government – will pay close attention to how the new reporting regulations operate in the UK. Similar obligations are expected to come into force in Northern Ireland later this year when employers could face fines of up to £5,000 (€5,600) per employee for breach of the reporting obligation.

However, it is important to bear in mind that the issue of equal pay is informed by a wide variety of socio-economic issues that can’t be solved by employers alone or by a single piece of legislation.

To close the gap, the Irish Government will need to take a range of actions including placing a greater focus on cancelling out the “motherhood penalty” by supporting women in their return to the workplace through more affordable childcare, expanding the concept of shared parental leave, as well as encouraging employers to facilitate more flexible working arrangements for all.

If, and more than likely when, mandatory reporting becomes law in Ireland, the disclosure of a pay gap may lead to internal employee grievances and claims around discrimination or equal pay.

This increased risk for employers, against the backdrop of very few Irish employers currently being in a position to demonstrate pay parity, has understandably raised concerns.

There is also a mistaken belief that personal data related to salaries will be disclosed. This has all led to a degree of resistance to the introduction of GPG reporting legislation.

It must be remembered that in the case of the BBC, it was an agreement related to its government funding that required disclosure of specific salaries. Private employers can take some comfort from the fact that GPG legislation in most other jurisdictions, and in draft form in Ireland, does not require the actual disclosure of salaries for individual job titles.

Irish employers now have the chance to gather and analyse their payroll data, as well as review their existing HR policies and compensation practices, to ascertain whether there is any gender bias, intentional or otherwise, before the introduction of a mandatory reporting requirement.

By taking corrective action or exploring whether a pay gap can be justified, employers can diffuse any equal pay discrimination issues before the new law comes into force.

Ireland Inc has a unique opportunity to act and take steps to get its house in order in advance of mandatory reporting obligations.

  • Ciara McLoughlin is a partner in A&L Goodbody’s employment group. You can view her profile here.
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