Michelle McDonagh, Senior HR Client Relationship Consultant, Adare Human Resource Management
Attaining a better gender equality in the workplace took a significant step forward in June as organisations with 250+ employees are now legally required to report their gender pay gap. The Gender Pay Gap Information Act, signed into law in July 2021, requires businesses to publish their first report by the end of this year.
However, since the publication of the gender pay gap regulations, there has been some confusion relating to interpretation of the guidance note provided by the Government. To provide some clarity, a FAQ document has now also been published. The full document and guidance note can be accessed here.
Here is an overview of the main points -
Reduction in headcount: Initially, organisations with 250+ employees are obliged to report the gender pay gap data. The deadline for this is this December. If an organisation reduces its headcount below 250 after their snapshot date in June, they are still obliged to report their data. The employer should be reporting on those employed on the snapshot date using the data for the previous 12-month period (June 2021 – June 2022).
Bonus payments including shares: Further guidance has been provided on how to report bonus payments and when adjustments are required. Annual bonus payments are straightforward given they are within the 12-month reporting period. Additional monthly payments, such as commission, earned in the 12-month period should be included in the hourly rate calculations.
However, if an employee receives a payment that relates to a timeframe longer than the reporting period it should be adjusted to calculate the amount relating to the reporting period only.
Also, if the employee receives shares as part, or in full, of their bonus payment, it should be included in the data based on the value it was given to the employee and at the value of the share when it was issued.
Statutory leave payments: In the original guidance note, statutory pay, such as maternity leave, was not included given the employee is not at work nor are they available to work. However, guidance published by the Department of Children, Equality, Disability, Integration and Youth stated that these payments should be included.
The latest information states the preferred approach to calculate the data for any employee in receipt of statutory payments is to use the notional number of hours that the employee would have worked had they not been on leave.
Pension contributions: The data used to calculate the hourly rate should be that before deductions at source, i.e. before tax. If payments, such as pension contributions, are taken before tax they should be included. Any payments taken from the net salary should not be included.
Employment status of employees: The employment status of employees as of the snapshot date should be noted; full-time, part-time, temporary, contract. The guidance provides details on whether they should be included and if so, how the data of each should be reported.
In terms of the definition of “employee” for the purposes of gender pay reporting, the clarification note states that all employees are counted however, in instances where an employee does not self-identify as either gender, an employer may omit the individual from the gender pay gap calculations but this must be handled sensitively and appropriately by the employer.
As the HR partner for your Chamber, our team is available to provide assistance with capturing, calculating and analysing the gender pay data of your Organisation. We can also devise and implement bespoke initiatives to support better gender balance in your workplace.
Adare Human Resource Management is a team of expert-led Employment Law, Industrial Relations and best practice Human Resource Management consultants. For more information go to www.adarehrm.ie or call (01) 561 3594 or email firstname.lastname@example.org.