European Pay Transparency Directive

European Pay Transparency Directive

about 1 year ago

The European Parliament and the EU Council have now reached a consensus on the Pay Transparency Directive, drastically expanding workers' rights across Europe. This directive will provide employees with the ability to know their salary information before any interviews or job offers are made. This development is sure to be welcomed by many throughout the region.

What is the new Pay Transparency Directive?

It should come into force in 2024 with the aim of implementing equal pay for all across the EU.

The proposal was presented to the EU Parliament in March 2021 and in December 2022 the measures for pay transparency were agreed upon, meaning that employers will be required by law to provide pay transparency and information even before one applies for the role.

The measures include:

Pay transparency before employment for job seekers
The employer will have to disclose the salary range in the advert or make a point to inform the candidate about this prior to the first interview. In addition to this, employers will not be allowed to ask candidates about their pay history.

Pay setting and career progression
Employers must make easily accessible to their employees a description of the gender neutral criteria used to define pay and career progression.

Right to information for the employees
Employees will have the right to ask for information related to their individual pay level and the average pay levels, broken down by sex, categories of employees performing the same duty or work of equal value, irrespective of the size of the company.

Reporting on gender pay gap
Employers with at least 100 employees will have to publish information on the pay gap between female and male workers. In a first stage, employers with at least 250 employees will report every year and employers with between 150 and 249 employees will report every three years. From five years after the transposition of the directive, employers with between 100 and 249 employees will also have to report every three years.

Joint pay assessment
When pay reporting reveals a gender pay gap of at least 5 percent and when the employer cannot justify the gap on basis of objective gender-neutral factors, employers will have to carry out a pay assessment, in cooperation with workers' representatives.

The member states will have 3 years to implement this in the national law.

Provisions for Victims of Pay Discrimination:

- Compensation for workers – employees can receive compensation, including full recovery of backpay and related bonuses.

- Burden of proof on employer – If the employer did not fulfill its transparency obligations, it will be their duty, not the employee’s, to prove that there was not discrimination related to pay.

- Sanctions that will include fines – Member states should establish penalties if pay discrimination is proved.

Share this article