The gender pay gap is the difference in the average gross hourly earnings of male and female paid employees across a workforce.
It compares the pay of all working men and women, not just those in similar roles, with similar working hours or similar qualifications or experience. It is usually measured across the economy overall, or an entire industry or occupation and is expressed as a percentage of men’s earnings. The gender pay gap in Ireland currently stands at 13.9%, meaning that women earn just under 86 cents for every euro earned by men.
What is the difference between the gender pay gap and unequal pay?
Often these two terms are used interchangeably but they have different meanings and it is important to differentiate between them. Equal pay for equal work is protected under the Employment Equality Acts 1998–2015, meaning that paying a woman less than a man for the same job because of gender is illegal in Ireland.
However, the gender pay gap refers to the difference in the average gross hourly earnings of male and female paid employees across a workforce, not just men and women working in the same role. When an organisation calculates the gender pay gap, it does not identify or indicate if there is any bias or discrimination present.
Why does the gender pay gap occur?
Paying an individual less for the same job based on their gender is wrong, unethical and illegal. And yet, the pay gap exists. The main reason for this is due to women not being equally represented in senior positions and/or working primarily in low-skilled or part-time roles.
Is a gender pay gap a sign of pay discrimination within my organisation?
A gender pay gap does not identify or indicate whether men or women are being paid differently for the same work or if there is a gender discrimination issue within an organisation. However, it does typically indicate that there is a gender imbalance within an organisation.
Gender pay gap reporting in Ireland – what do we know so far?
The Irish Human Rights and Equality Commission (Gender Pay Gap Information) Bill 2017 is on track for implementation this year. The legislation requires employers to calculate and report on their gender pay information annually and will mirror the United Kingdom’s model, where gender pay gap reporting was introduced in 2017. When enacted, both public and private sector employers will be required to report on employee and salary data, including gender, base salary and the employee’s organisational unit. The responsibility for reporting is expected to fall between HR and payroll departments in organisations with more than 250 employees. This threshold will gradually be reduced to employers with more than 50 employees within three years of implementation.
We anticipate employers will be required to submit the data to a designated public body, as well as publishing gender pay gap details on their website. The draft legislation includes a number of measures to tackle non-compliance, including the facility to apply for an order from the Circuit Court or Workplace Relations Commission compelling an employer to comply.
What steps can organisations take to reduce the gender pay gap?
Efforts to close the gender pay gap are long-term. Organisations must use the information gathered from their gender pay gap reporting to guide and shape their action plan. For example, if an organisation has a large gender imbalance in favour of men at management level, measures to understand why this is happening and how to address it should be put in place.
This article first appeared in Briefly a weekly eNewsletter from Accountancy Ireland on the 4th March 2019.