Could we end the gender pay gap in a generation?

Colette Sexton, news correspondent at The Sunday Business Post, on new legislation which will help to close that pesky gender pay gap.

It might not reflect your personal situation but like it or not, historically, women on average have earned less than men. There are a lot of gender pay gap deniers out there but here are the facts. In Ireland, women currently earn 13.9 per cent less than men. Just to clarify, the gender pay gap is the difference between what women in total are paid compared to men. This is separate from the idea of equal pay between men and women for the same work.  

While the Irish gender pay gap figure is better than the EU average of 16.7 per cent, it is still not good enough. On the plus side, there is an appetite at government level to fix this disparity. In June, the Irish cabinet approved legislation which will require companies to report the gender pay gap in their organisations. The Gender Pay Gap Information Bill will be applied initially to both public and private sector entities with over 250 employees for the first two years. In the third year, it will apply to those with over 150 staff, and in the fourth year, to those who employ at least 50. Among the requirements will be that employers have to publish differences in hourly pay, bonus pay, part-time pay and pay of men and women on temporary contracts. It’s also expected that companies that do not report their pay gap details will have to pay a fine. It is expected to be introduced as law in 2019.

This might seem like a box ticking exercise that will gain some media attention before dying down again. But in reality, information means power. Companies and chief executives can harp on about equality but can easily be bluffing. Voluntary measures are not powerful enough. This legislation will give us hard facts. It will make executives accountable. And best of all, it will require regular reporting which means we will be able to see what companies are introducing positive changes, and, more importantly, which ones are not.

Similar legislation, which forces companies with more than 250 staff to report annually on their gender pay gap, was introduced in the UK last year. When the first reports were published earlier this year, there was huge public interest. Some companies reporting the biggest gaps included Apple, Ryanair, and Boux Avenue lingerie group.

Sarah Henchoz, employment partner at law firm Allen & Overy, told The Guardian when the legislation was introduced in the UK that: “The gender pay gap reporting provisions are likely to do more for pay parity in five years than equal pay legislation has done in 45 years”.

Without action, research found that the UK’s gender pay gap would not close until 2069. In addition, the UK government believes that the attention companies receive because of gender pay gaps will force them to take measures to eliminate them, and this is expected to add £150 billion to annual GDP by 2025.

For those that argue that the legislation will not make a difference, consultants at Mercer found that 67 per cent of major Irish employers were worried about the impact on their reputation if the differences between how they pay men and how they pay women are published. Reputations in business are everything. Good reputations means sales. Bad reputations means boycotting. That’s why companies spend billions every year on advertising, marketing, and public relations. And that’s why the publication of this information will force companies to assess whether or not they treat men and women differently and to rectify that if they do.

Roll on 2019, it is going to make for some very interesting reading (I’m preparing my “boycott” list already).