Pay Transparency: It is a big deal

EU Pay Transparency Directive aims to create a cultural shift in closing gender pay gaps while UK retailers face billions in equal pay claims. Irish companies report cultural shifts after gender pay reporting.

Key points: The EU Pay Transparency Directive aims to create a cultural shift in closing gender pay gaps. UK retailers face billions in equal pay claims under the Equal Pay Act, while a survey of Irish companies reports cultural shifts after implementing gender pay reporting.

Why this matters: Pay transparency regulations are becoming more stringent and widespread, potentially exposing companies to legal and reputational risks. The cultural shift towards pay equity is gaining momentum, affecting workplace practices and employer-employee relations.

What might happen next:  We can expect increased scrutiny of pay practices, more equal pay litigation, and a growing emphasis on demonstrable pay equity measures across the EU.

What you should be doing:  Conduct thorough pay equity audits within your organization. Develop clear, objective criteria for pay decisions and promotions.

ADDITIONAL INFORMATION:

Deloitte says that the EU Pay Transparency Directive:

 “is more than just a regulatory update; it's a powerful catalyst for change, designed to dismantle the entrenched structures that perpetuate the gender pay gap. This directive goes beyond simply increasing transparency; it aims to create a cultural shift where pay equity is the norm, not the exception.” 

You can read their analysis here. 

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Financial Times report on how the British retail sector faces multi-billion pound payouts under the Equal Pay Act as courts and tribunals issue judgements based on “work of equal value.” 

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In Ireland, where many of our member companies have their European headquarters, the annual IRN/CIPD pay survey reports that:

• In response to the question When did your company first publish a gender pay report?, 45% said ‘not yet’; 14% answered 2024 and 41% responded 2023, or earlier. 
• A high level of respondents indicated that company culture has become focussed on inclusivity, with 46% of respondents saying there was more focus on an inclusive culture since publishing the GPG report. 
• Other changes noted included: job description and recruitment practices (41%); action plan roll out (25%); increased development (31%); and people policy changes (28%). 
• 27% said there had been changes in leader and manager behaviours since publishing the GPG report, 17% said changes in review of bonus/reward processes and 23% said external benchmarking.