Changing Workplace Culture – Gender Pay Gap Reporting

19 March 2018

With the deadline for Gender Pay Gap Reporting fast approaching, the differences between men and women’s pay is firmly in the spotlight and it doesn’t make for pretty reading.

Of the 900 GB businesses due to report, 19% have published their statistics ahead of time, revealing that 85% of men are paid more than women (based on average hourly earnings of each gender).

Such staggering, but unfortunately unsurprising, figures are likely to continue to emerge in the lead up to April 4th, the date by which, employers with 250 or more employees are required to have published, and continue to report annually, any pay differential between their male and female employees.

As a brief aside, it is important to note that the gender pay gap differs to equal pay, which by definition provides the legal right for men and women to be paid the same for equal work. Whilst it is therefore possible for a business to have an equal pay workforce, they may face a pay gap issue.

So what, if any, are the implications of the new rules for businesses closer to home?

While the imminent Gender Pay Gap Reporting Rules affecting businesses in Great Britain have not been extended to Northern Ireland, it’s really only a matter of time before we have our own, possibly more stringent, legislation enforced.

If and when the Assembly are up and running, from a review of the draft legislation (The NI reporting obligations, which are contained within the Employment Act (NI) 2016 remain in draft form due to the impasse at Stormont), three striking differences are evident:

  1. The NI legislation goes further than that in GB with a requirement that NI companies publish information to include workers within each pay band based on ethnicity and disability.
  2. The NI legislation proposes a fine of up to £5000 per employee for non-compliance with the reporting obligation.
  3. The NI legislation goes further than its counterpart in GB by stating that where there are differences in pay between male and female employees, an employer is under an obligation to publish an action plan to eliminate those differences and must send a copy of such plan to all employees and any recognised Trade Unions.

Whilst the laws in GB apply to businesses with more than 250 employees, and similar laws in the Republic of Ireland apply to businesses with more than 50 employees, the NI draft legislation is silent on the employee size of company expected to provide the reporting information. There is much speculation that the threshold in Northern Ireland could be significantly lower than 250 employees and more in line with the South.

So what should businesses do now?

Given the potentially crippling penalties facing the majority of NI companies, it would be prudent for businesses here to get ahead of the game and adopt the necessary procedures to ensure that they are ready, from a practical perspective, to implement the reporting when the legislation comes into force.

We would also advise companies to think about taking additional steps – perhaps an internal audit in relation to pay grades and bands, in addition to reviewing information you hold in relation to the composition of the workforce – all of which may help you identify and, where appropriate, rectify any current or historical pay gaps in advance of the regulations being introduced here.

For further information contact Imelda McMillan at O’Reilly Stewart Solicitors (imelda.mcmillan@oreillystewart.com / 02890 321 000).

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