Legislation to reduce gender pay gap set for this year

Draft legislation aimed at reducing the gender pay gap is expected to be initiated by the Government before the summer recess and will likely be far stronger than that recently enacted in the UK.

Senator Ivana Bacik, who is behind a Labour Party Bill on the issue that has already passed several stages in the Seanad, said there was broad support for the introduction of legislation, which would help reduce differences in levels of remuneration between men and women.

She was speaking the day after the passing of a deadline in the UK that forced companies with more than 250 employees to report on gender pay differences within their organisations.

More than 10,000 companies, including a number of Irish ones with a presence in the UK, submitted details on wage transparency with the final figures indicating that 78 per cent of UK firms pay men more than women on average.

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Speaking to The Irish Times, Ms Bacik said she was confident legislation would be enacted in Ireland before the end of the year and indicated this was expected to be stronger than the UK's Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.

Internal pay differences

The current Programme for Government includes commitments to reduce the gender pay gap that include plans to force companies to reveal internal pay differences. A public consultation on the issue took place last August with the summary of responses received published earlier this year. A symposium also took place in early January with the Department of Justice and Equality saying on Wednesday it hoped draft legislation would be enacted before the summer break.

Labour’s Bill requires companies with more than 50 employees to reveal details of any gender pay gap among its employees. It also proposes fines of up to €5,000 for companies that do not abide with legislation.

The Government has proposed amendments to the Labour Bill that should speed up its introduction. One such amendment would see the State collecting gender gap data rather than the Human Rights and Equality Commission as originally envisaged. The Government has also been seeking the Attorney General's advice on data protection concerns.

“Whether it is my Bill or whether they bring forward an entirely new one remains to be seen but in principle it is accepted that it will happen this year,” Ms Bacik said.

Differences in earnings

While often confused with equal pay, under which men and women doing the same work are expected to receive the same rate, the gender pay gap measures the difference between the earnings of all men and women across an entire organisation.

Figures published by the Central Statistics Office late last year show the pay gap had widened by 2 points to 14 per cent from 2012 to 2014 even though more women were obtaining higher education qualifications.

The National Women’s Council of Ireland (NWCI) said it hoped the forthcoming gender pay legislation would be strict, particularly in terms of imposing criminal sanctions on companies that do not comply with the regulations.

NWCI's legal and policy officer, Denise Rhodes, also said it would like to see legislation extended to cover partners at professional services firms, who are currently excluded under the UK's mandatory reporting rules.

Dr Kara McGann, a senior labour market policy executive at Ibec, said the lobby group was collaborating with the Department of Justice and Equality and trade unions on a reported method for companies that would provide real insight into the cause of pay gaps within organisations.

“Momentum has stalled somewhat but with a renewed focus on the gender pay gap and its roots in the representation of women in business, this offers Ireland an opportunity to work with all stakeholders to move the dial substantially if we are serious about really addressing this problem,” she said.

Economy boost

A study from consulting firm PwC estimated cutting the pay gap could boost OECD economies by $6 trillion (€4.9 trillion). However, Mary Brassil, a partner at McCann FitzGerald's employment group, warned that gender pay gap reporting was not a magic bullet.

“Alone, it will not solve the myriad of socio-economic issues contributing to the gender pay gap. However, used properly, it has the potential to be an invaluable diagnostic tool; identifying where gender pay gaps exist,” she said.