As organisations across Ireland prepare to publish their reports, Deirdre Malone outlines some practical aspects of the Gender Pay Gap Information Act.
Among the key questions for employers about Gender Pay Gap reporting, one of the most important is who to include. All employees must be included, but this is not as straightforward as it appears.
The definition of an employee in Irish employment law is well understood, but for Gender Pay Gap reporting, the statutory definition is taken from the Employment Equality Acts and includes individual contractors who are engaged personally to provide services. This definition has the potential to make things very complicated for employers.
In most cases, employers have gone to some lengths to ensure that these individuals are not deemed employees. They do not have HR records for them, and they do not know how much the contractors are paying themselves for their work for the organisation, nor have they any idea of their leave and bonus arrangements. Including this cohort of workers in the Gender Pay Gap report will place many employers in a difficult position. Furthermore, this data gap may force some employers to exclude contractors from their Gender Pay Gap report.
The Guidance Note that accompanies the Gender Pay Gap Information Act (the Act) advises employers to consult Workplace Relations Commission (WRC) case law for advice, but this is not as comprehensive as it could be. Instead, a practical and common-sense approach is required.
Non-binary and transgender employees
Very simply, everyone identifying as female must be included as female in the report, and the same applies to males.
There is no definition of male or female in the Act, and it is up to individual employees to self-identify their gender. Organisations must remember that HR records may not be in accordance with individuals’ self-identification.
Where there are non-binary individuals who do not identify as either gender in the workforce, they are not included in the Gender Pay Gap calculations but should be included in the headcount.
Employers must ensure that data collection concerning gender identity is carried out as sensitively as possible. Those collecting the data must never rely on second-hand information or hearsay.
Employers must engage with all employees about why they are seeking this data. They must ensure they obtain it directly from the individual or a trustworthy and reliable source. However, no one should be singled out and asked about their gender.
Large group companies with numerous legal entities
Many large organisations will wish to produce a single Gender Pay Gap report for their Irish operations. However, they need to be mindful that each legal entity in a group that employs more than 250 people has its own statutory reporting obligations.
Nothing prevents the organisation from producing a consolidated report, however, if each legal entity also reports its individual statutory requirements within the consolidated report.
There will also be cases where large organisations have entities that employ numbers below the reporting threshold. In our experience, though, companies tend to report on those entities—either within a consolidated report, or separately, to present the fullest possible picture of gender representation across its business and also in the interests of transparency.
Where an organisation chooses not to report on smaller entities, the reasons behind that decision must be communicated fully, so they cannot be accused of a lack of transparency.
Managing leave when calculating ordinary pay
If a type of leave is paid, it is included in the Gender Pay Gap report. All pay received by every employee in the 12 months up to the snapshot date must be included in the calculation.
However, this can give rise to anomalies. Take maternity leave, for example. Where maternity leave is paid, an employer may pay an amount to top-up statutory maternity benefit. Only the portion paid by the employer is included in the calculation, however, thereby artificially depressing the hourly pay rate of the employee in question.
Where employees exercise an entitlement to additional unpaid maternity leave, this can further skew the figures. This will have to be looked at as it will be essential to explaining the anomalies in the circumstances arising for various cohorts of employees.
Deirdre Malone is Head of Employment Law at EY Law Ireland