Gender Pay Gap and What It Means
The Gender Pay Gap is a topical subject, not just in Ireland but also throughout the EU. Ireland is giving a warm welcome to the Gender Pay Gap Information Bill 2019 which has been signed into legislation as of July 2021.
Women in the EU earned on average 14.1% less per hour than men in 2018 (EU27 data). However, there are huge differences between the EU countries. What will this look like for Ireland?
What is the Gender Pay Gap?
Firstly, the gender pay gap is a metric that tells us about the difference in the earnings of males and females in the labour market. It is one of the main tools used to assess the extent of gender inequalities in the labour market. The gender pay gap should not be confused with equal pay which is a common misconception. Equal pay is already a legal requirement in place since 1975 giving women and men the right to receive equal remuneration for doing the same job.
The gender pay gap is a broader measure of the difference in the average earnings of men and women across an organisation. It can be seen as an indicator of women’s representation in a more senior level. In short, a common way of calculating this is by finding the annual salaries of women working full time and then identifying the median. This is then completed for men to compare and calculate the pay gap.
Why do Women Earn Less?
There are many reasons why women may earn less in the workplace that stretch far beyond the issue of discrimination. Some issues surrounding the gap are:-
- Sectoral Segregation
By and large, there is an overrepresentation of women in relatively low-paying sectors such as care and education. These sectors have more part time work available which is typically paid circa the national minimum wage. Some women are driven to these types of work due to the costs of childcare.
- Work-Life Balance
Unless you are ahead of the curve like Diageo, there is a big discrepancy in Ireland when it comes to paid time off for taking care of children. While efforts have been made to increase parental leave and parents leave, it has been a long standing issue that contributes to the Gender Pay Gap.
- The Glass Ceiling
The glass ceiling refers to the social barrier preventing women from being promoted to top jobs in management. There is also a larger Gender Pay Gap if one looks at women over 40.
Will This Apply to My Company?
As it stands, the Gender Pay Gap reporting obligations are for organisations with 250 or more employees. They are scoping out on the reporting over the next three years so this will look to extend to organisations with 50 or more employees.
Are There any Repercussions?
Reputation may be a factor for some companies, however, companies in Ireland have welcomed the new legislation. Aside from this, there is currently no compensation or monetary fines detailed in the Bill. The only remedy that can be ordered from the Director General of the WRC or an Adjudication Officer is to require the employer to take a specified course of action.
What Should I Do Now?
To prepare for 2022, when reporting obligations come into effect, companies should start
1. Identifying their gender pay gap and
2. Framing the policies to address both pay and career equity.
All this will help to avoid any matters in the WRC and importantly, it also achieves a more inclusive working environment. As they say, Retention is the new Recruitment and this will become an attractive piece for top talent and tackling this top line issue!
Please do not hesitate in getting in touch if you have any questions.
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This blog was brought to you by Sarah Quirke, HR Executive with Corporate HR Ireland. Sarah can be reached by Email: sarah@corporatehrireland.com
