6 August 2024
As many employers in Ireland commence their third year of gender pay gap reporting, we highlight some of the recent legislative changes and flag updates employers should be aware of when commencing their 2024 gender pay gap reporting cycle.
In late May 2024, the Employment Equality Act 1998 (Section 20A) (Gender Pay Gap Information) (Amendment) Regulations 2024 (the ‘2024 Regulations’) were introduced. The Department of Children, Equality, Disability, Integration and Youth has also updated both their Gender Pay Gap FAQs for employers document (the ‘FAQs’) and the associated Guidance Note document. We summarise some of the key changes employers should be aware of below.
The 2024 Regulations amend the original Employment Equality Act 1998 (Section 20A) (Gender Pay Gap Information) Regulations 2022 (the ‘2022 Regulations’) to reflect the obligation on relevant employers with over 150 employees to report on their gender pay gap in 2024. This reporting threshold will further decrease to those with over 50 employees in 2025.
The 2024 Regulations also provided an update on the definition of ‘basic pay’ to include payment during a period when an employee is on certain types of statutory leave, entitling them to a corresponding social welfare benefit. The leave types include adoptive leave, maternity leave, parents leave (or transferred parents leave) or paternity leave (or transferred paternity leave). Employees who are entitled to the relevant benefit for each of these types of leave under the Social Welfare Consolidation Act of 2005, shall now have these payments included as a component of their basic pay calculations. Employers should also incorporate salary top-ups to employees on statutory leave as listed above when calculating employees’ pay.
A minor amendment was made to the calculation used to determine hours worked. The figure at 4(1)(b)(i) of the 2022 Regulations is amended from 52.14 to 52.18 meaning that the calculation of variable hours over a 12-week period is now established by using the multiple of 52.18. Although only a minor change (likely linked to accounting for leap years), this will influence the calculation of certain employees’ hours worked during the reporting period.
We understand that the development of an online reporting system is underway. We expect this will consist of a central portal where all employer data will be uploaded. Whilst we think it is unlikely this will be in place for 2024 reporting, we await further detail on its implementation and whether its operation will move the reporting deadline from December to November in future years. This would result in employers having five months from their June snapshot date to report on their gender pay gap, instead of the current six-month period.
One of the most significant changes brought about by the 2024 Regulations was the shift in approach to how share options and interests in shares are treated for gender pay gap calculations. After the 2022 Regulations were introduced, many employers struggled with the application of these elements as a part of bonus remuneration calculations. Share options and interests in shares are now included in the benefit in kind calculations rather than under bonus remuneration. The definition of benefit in kind now includes ‘any non-cash benefit of an estimated monetary value and, for the purposes of these Regulations, includes share options and interests in shares.’ Shares (as distinct from share options and interests in shares) are still part of bonus pay and as such, the value of shares issued during the reporting period should be included in bonus remuneration calculations.
With the recent changes in mind, we recommend employers (especially those new to the reporting regime) begin their preparations now and collate their data for processing. Since the introduction of the reporting regime in 2022, we have assisted employers in various sectors to prepare their data, report on their gender pay gap and provide a comprehensive gender pay gap service in collaboration with KPMG Ireland’s Tax Transformation & Technology Team.
Our Employment Law Team, led by Aoife Newton, can assist your team in preparing a comprehensive and accurate gender pay gap report. We can make your stakeholders aware of the issues, prepare a current “as is” analysis of your payroll to assess the current status of your organisation and provide a communication and action plan to address and explain any gaps arising. Please contact a member of the team for more information.
