Businesses need to prepare for new European Union rules demanding that they publish details on gender gaps in pay, say experts.
Europe’s Pay Transparency Directive is due to become law in June, but many employers are yet to fully prepare their organisations for the change.
Just 9 per cent of employers in Europe, including the Republic, say their strategy is in place, a study by HR and pensions adviser Mercer will show on Monday.
This could expose them to penalties, litigation and the potential loss of workers over a lack of transparency, the firm warns.
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“In Europe, regulation is moving from pay gap reporting towards fuller pay transparency and equal pay enforcement,” said Mercer.
Fiona O’Connor, senior rewards consultant at the firm, urged businesses to act now.
“Transparency around pay can deliver core business benefits,” she said.
The new law will require companies to provide information on individual and average pay by gender.
The regulation will also demand that they assess pay by gender, on request, report on gaps and take action to address such differences where they are not justified.
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The law will apply to all organisations with operations in the EU and adopts a broad definition of pay that includes bonuses and other rewards.
Globally, about three out of four organisations have pay transparency systems, but just a small number have implemented them.
The Republic, United Kingdom and continental Europe lag many other regions, noted Mercer’s report, Pay Transparency Under Pressure: How ready are employers?
It shows that in European countries, about half are still developing a strategy, and another 18 per cent to 30 per cent are still implementing one.
Only 4 to 14 per cent have fully developed and implemented a pay transparency policy.
Gaps in pay between genders, which mostly favour men, have sparked increasing anger over the last decade.
Countries worldwide have responded by developing an “extensive patchwork of rules”, according to Mercer.
Iceland, Germany and the UK were among the first to pass laws demanding transparency from employers.
Many other jurisdictions followed suit. Most businesses say regulation and laws are the main reasons they have adopted pay transparency policies.
