SO, how much money do you make?
Ireland is currently preparing to implement the EU Pay Transparency Directive by 2026.
This Directive introduces a wide variety of rules that will compel bosses and managers to become a lot more open about how they determine pay.
Job ads will be required to include salary ranges, employees will gain the right to request information on pay levels and employers will be prohibited from asking job seekers about their salary history or including pay secrecy clauses in contracts.
Although there is not yet a binding legal requirement in place in Ireland, many employers are already taking action in preparation for next year's change.
A recent global survey conducted by Mercer involving over 1000 companies, 400 from Europe, revealed that 69% of Irish organisations have either already started a pay transparency plan or are actively working on one.
This suggests that many employers understand both the legislative expectations and the cultural shift that is underway.
Nonetheless, the same survey highlighted that there is still a long road ahead.
Only 32% of Irish companies currently share their pay policies on a global scale, and just 31% disclose gender pay gap data.
It also noted that 72% do not publish employee pay ranges at all, showing a gap between emerging expectations and current practice.
For many companies, the drive toward transparency is mainly to do with compliance, with 97% of survey respondents stating legal requirements as the main motivator.
However, nearly half of Irish respondents also acknowledged that employees now expect more transparency.
One of the greatest challenges lies in managing internal equity, where more information is available to employees than ever before.
Once the directive comes into force, employees will be able to compare their pay with that of new hires and colleagues doing similar work.
This shift may expose inconsistencies that employers can no longer explain away.
In cases where gender-based pay differences exceed 5% and cannot be justified using objective, gender-neutral criteria, employers will be required to explain those gaps.
According to Irish law firm Mason Hayes Curran's website, "the Directive requires employers to report on the gender pay gap between categories of worker broken down by basic and variable pay."
This will be a big change for businesses and puts the burden of proof in disputes over pay onto the employer.
This presents a particular challenge in industries where pay offers to new hires may outpace the salaries of long-serving staff due to competition in the market.
Without clearly documented reasons, like differences in experience or qualifications, existing employees may view these disparities as unfair.
To avoid trouble, the report suggests businesses will need to undertake a review of their current pay structures.
This means conducting pay-equity analyses to identify discrepancies and then checking the legitimacy of those differences.
Where pay ranges already exist, they must reflect actual organisational practices.
On how this will be enforced and possible penalties, Mason Hayes Curran goes on to note, "the equal pay regime in Ireland is currently based on individual enforcement through equal pay claims. However, the Directive requires Member States to set out rules on effective, proportionate and dissuasive penalties, including fines and compensation for employees."
The Mercer report suggests that workers should understand how pay is determined and how performance, experience, and qualifications, play a role in setting their compensation.
Hiring managers and HR teams must be trained to navigate these conversations confidently and consistently.
Focus groups and surveys can help businesses understand how their workforce views fairness and transparency.
The Directive falls under the purview of the Minister for Children, Disability and Equality Norma Foley, and she has stated on the official government website that:
"Ireland's Gender Pay Gap Information Act 2021 already complies with the basic requirements of the Directive,' and that 'department officials are currently examining the best approach to transpose the other elements of this Directive into Irish law."
The Pay Transparency Directive is expected to come into force by the middle of next year.
See More: EU, Equal Pay, Mercer, Pay Transparency Directive
