New regulations require employers to report the difference in pay between men and women. The reporting requirements apply to all public and private sector companies to reduce the gender pay gap in workplaces. According to Eurostat, Ireland’s gender pay gap in 2019 was 11.3%. The pay gap between the genders is generally lower for workers in low and middle-level jobs and widens with age and senior-level jobs.
While the Gender Pay Gap reporting focuses on large companies, small and medium-sized businesses should not dismiss the legislation. SMEs should consider their gender pay gap and find remedies for improving equality. Snow Technology can help you evaluate the gender pay gap in your company and assist with reporting through the hassle-free payroll process.
What Is Gender Pay Gap?
Gender Pay Gap indicates the difference in average hourly wages for men and women across the workforce. This isn’t the same as pay rates for equal work since the difference are calculated regardless of the seniority. The legislation seeks to redress the salary imbalances between men and women by mandating all employers report on the gender pay gaps in the company. The introduction of the legislation will improve diversity and inclusion strategies in Irish-based companies since the companies have to show the reasons for the gender gaps and provide measures to address the issue.
When considering the causes of the gender pay gap, companies should evaluate their current promotions, hiring, career development and salary raise strategies. Sometimes, the gender pay gap arises from unequal pay for male and female employees for equal work. However, most gender pay issues stem from differences in characteristics of men and women in the company like age, hours worked and occupation. Research shows that most women are concentrated in lower-paying professions like education and healthcare while men take up high-paying professions like IT and finance. The underrepresentation of women in leadership positions also increases the pay gap in most companies.
The gender pay gap is caused by social and historical factors, including labour market experience, lack of women in senior roles, equal pay issues and family responsibilities. Since the legislation requires employers to disclose the causes of gender pay gaps, it gives them a chance to reflect on areas of improvement to reduce the gap. The pandemic worsened the existing gender disparities, and the legislation offers the perfect opportunity for employers to embrace change.
Gender Pay Gap Legislation
The Gender Pay Gap Act 2021 was created to amend the Employment Equality Acts 1998 to 2015 and signed into law in July 2021. The amended regulations introduce publication and reporting obligations to employers on gender pay gap issues. Private and public sector companies are bound by the legislation to publish the records on gender pay gaps on the company website and make them available for inspection by all stakeholders.
The legislation only applies to companies with over 250 employees during the first year. In the second year, the threshold will be lowered to 150 employees and 50 workers in the third year. The reporting date depends on the snapshot date chosen by the employer in June. After determining the snapshot date, they have six months to calculate the Gender Pay Gap in the company and publish the records. The remuneration data used in the calculations should reflect employee salaries for 12 months preceding the snapshot date.
Aside from the figures, employers are also expected to explain the reasons for the gender pay gap in the company and provide measures taken to reduce the gap.
Reporting Requirements for Gender Pay Gap
A company needs to carry out a headcount of all the employees within the stipulated period. This includes data on employees on leave and workers who worked temporarily during the period. The Gender Pay Gap report should have the following details:
• Mean hourly remuneration gap: You need to provide the difference in average hourly remuneration for male and female employees. The figure should be expressed as a percentage of the average hourly pay for male employees.
• Median hourly remuneration: You should calculate the median hourly wages of both genders and their differences. The difference is also expressed as a percentage of the median hourly earnings of male workers.
• Mean bonus remuneration: The employer needs to record the difference between the average bonus compensation for male and female employees and express it as a percentage of the mean bonus for male employees.
• Median bonus remuneration: The difference in the median bonuses of female and male workers is calculated, and the figure is expressed as a percentage of the male median bonus remuneration.
• Mean hourly compensation of part-time employees: You should calculate the differences in mean hourly rates for both genders and express it as a percentage for the male gender to get the mean hourly part-time gender gap figure.
• Median hourly remuneration for part-time workers: Calculate the difference between male and female median hourly remuneration.
• The percentage of male employees paid bonuses, and a percentage of female workers paid such remuneration.
• You have to provide the percentage of male employees given benefits in kind by the company compared to the female gender who received similar benefits in kind.
• Provide the difference in mean and median hourly remuneration for male and female employees on temporary contracts with the company.
• The percentage of male and female employees falling within the lower remuneration pay band, lower-middle remuneration band, upper-middle pay band and upper remuneration band.
How to Reduce the Gender Pay Gap
The Gender Pay Gap legislation clarifies organisations’ issues, and they can find ways to address them and ensure equality. Some of the positive steps that can reduce the gender pay gap in Ireland include:
Employers should work towards eliminating bias, discrimination and inequality in the workplace. It is vital to tackle outdated stereotypes and create an environment without a glass ceiling for both genders. Decision-makers and managers should ensure they don’t hold unconscious bias during promotion selection, salary review and interviews.
Flexible Working Conditions
The disparity in working hours is a major contributor to the gender pay gap. Most women prefer flexible working hours and take up part-time positions due to external commitments. Since they cannot attend the fixed business hours, it places them at a disadvantage over men who take full-time roles. By offering flexibility, you improve inclusivity and reduce the pay gaps.
Employers should provide career development and leadership training to prepare workers for senior roles in the company. This will encourage women into management roles and close the gender pay gap. Company leadership should also avoid subconscious gender opinions when considering employees for advancement in the company.
Encourage Women to Embrace Non-Traditional Roles
For companies in male-dominated sectors like construction, finance and IT, employers should actively run female-oriented advertising to encourage female application. Companies should also participate in education and seminars to dispel future stereotyping of roles. If companies can encourage future generations to view jobs as gender-neutral, they can eradicate the gender pay gap.
Whether you run an SME or a large company, you need to be a progressive and neutral employer. It makes your business attractive to employees and builds a foundation of trust with your workers. Participating in the reduction of the gender pay gap also improves your reputation.
A company can ensure they have the right data for the report by preparing their information in advance. Preparation makes it easier to analyse the data and understand the company’s pay gap when it is time to publish the reports. Snow Technology helps build awareness and provides insights into the practical challenges of the gender pay gap. You can also use the payroll tools to ensure your salary information is up to date.
Snow Technology will be running a series of Gender Pay Gap Webinars in September. We will be discussing what it means for your organisation and how Snow Technology can help you navigate the Quantum Payroll system regarding Gender Pay Gap.