Pay Transparency: Consequences of Non-Compliance

Over the past number of weeks, we have highlighted the scope of the EU Pay Transparency Directive, the operational implications for Organisations, and the areas where the level of preparation required is often underestimated.

It is important to also understand and address the consequences of failing to comply.

While the Irish legislation transposing the Directive has yet to be finalised, the Directive itself is clear that Member States must introduce effective, proportionate and dissuasive penalties for non-compliance.

These will include measures such as:

• Financial penalties based on the Organisation’s turnover
• Compensation for affected Employees that is not subject to an upper limit
• Increased risk of equal pay claims with the burden of proof shifting from Employee to Employer
• Reputational exposure, particularly where pay practices are challenged publicly

The Directive also strengthens Employees’ ability to enforce their rights, including access to information and legal remedies where pay inequality is identified.

While the precise penalties applicable in Ireland will only be confirmed once national legislation is enacted, the overall direction is clear: Pay Transparency obligations will be enforceable, and failure to prepare will carry legal and operational risk.

Our experienced Reward Consultants would be happy to discuss how Pay Transparency may affect your Organisation and how we can support you as you prepare – please contact Neil McCormack at nmccormack@adarehrm.ie today.

Preparing now will help minimise future pressure, risk and exposure.