Firms may need to consider voluntary pay gap reporting

DIVERGENT gender pay gap legislation across the UK, Ireland and the Channel Islands could provide reputational and operational challenges for firms operating across those jurisdictions, employment lawyers at Ogier have warned.

Rachel DeSanges, head of employment at Ogier. (31087139)
Rachel DeSanges, head of employment at Ogier. (31087139)

With gender pay legislation still evolving, firms need to think about future-proofing their employment procedures, they said.

The gender pay gap is the difference between the average earnings of men and the average earnings of women across a workforce over a period of time. In the UK, since 2017, employers with a headcount of 250 employees or more have been required to report certain gender pay gap information and may publish a discretionary supporting narrative. However, legislation and requirements are not progressing at similar speeds in all locations.

‘Even though Guernsey doesn’t have specific legislation to mandate gender pay gap reporting at the moment, Guernsey is in the process of overhauling its discrimination laws,’ said Rachel DeSanges, head of employment at Ogier in Guernsey.

‘The changes could include a statutory right to equal pay for work of equal value and a requirement for gender pay gap reporting.’

She said voluntary reporting could become more widespread as firms look to embrace transparency. ‘Some employers, either because their counterparts in other jurisdictions are having to do so by law, or because they wish to be more transparent, will consider pay gap reporting on a voluntary basis. Those who don’t do it may then suffer reputationally. Voluntary reporting could also be a useful recruitment tool.’

Will Austin-Vautier, senior associate in Jersey, said Jersey’s discrimination law also provides that employers should not discriminate in what they pay men and women.

‘However, we’re certainly seeing some real pressure on a number of fronts in this area, including through the scrutiny system, which may well lead to legislation being brought forward around mandatory gender pay gap reporting in due course.’

Daphne Romney QC of Cloisters, keynote speaker at the Ogier webinar, highlighted that reporting gender pay gap information was a complex area that needed to be backed up by subsequent action if it was to be effective.

Mary Gavin, managing associate at Ogier Leman in Dublin, said that the gender pay gap in Ireland – where firms with 250 of more employees must now report their gender pay gap – was currently 11.3%.

‘There are further staggered changes on the horizon too,’ she said. ‘Unlike the UK, with the exception of Northern Ireland, employers with over 150 employees will be required to prepare reports in 2024 and those with over 50 employees would have to do so by 2025. This staggered roll-out to report is delivered following consultation with trade unions and employer representative groups.’

She said a key difference between the law in Ireland and the UK is that employers must set out reasons for any gender pay gap and measures that might eliminate or reduce such differences.

Panel chairwoman Helen Ruelle, director of local legal services at Ogier in Jersey, said the situation was clearly still evolving.

‘The important thing is for employers to begin to have serious discussions now about the key issues involved in voluntary and mandatory gender pay gap reporting and what that could mean for their employment procedures. That way, they can be ahead of the game and reap the benefits that transparency in this area can bring.’

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