The European Directive has adopted the Pay Transparency Directive proposed by the European Commission in March 2021 enshrining the right to equal pay for male and female workers for equal work or work for equal value, a fundamental principle set forth in the article 157 of the Treaty on the Functioning of the European Union.
Today, female workers in the European Union earn less than the male workers for equal job, with the average gender pay gap to stand at just under 13%.
This new progressionist legislation having been characterized as the most inclusive European legislation is a powerful tool aimed to eradicate the gender pay gap and strive for gender equality in all forms of employment relationships, not only in the private but also in the public sector, including also job applicants.
The Pay Transparency Directive introduces important reporting obligations for employers, provides remedies and implements enforcement mechanisms outlined concisely as follows:
- Pay Gap Reporting. Organizations with more than 100 employees must report information on pay gap. For instance, the difference of average pay levels between women and men employees in their organization. The regularity of reporting is analogue to the size of the organization. While employers with more than 250 workers must fulfil their reporting obligations annually, employers with 100 to 249 workers must report every three years. Employers with less than 100 employees have the option to decide whether they will voluntarily divulge information on the pay gap, unless the member –state decides to make reporting mandatory. The pay gap information must be reported to an authority which will be designated by each member-state qualified for gender inequalities and remedies.
- Joint Pay Assessment. A joint pay assessment must be carried out in the case that the difference of average pay between female and men workers exceeds 5% for the same work or work of equal value and it has not been justified by any objective factor and employer has not rectified the situation within a period of six months from the reporting of the information on pay gap. In this case, employer is required to conduct a joint assessment with the worker's representative.
- Ban on pay secrecy and right to information. Employees will have the right to receive complete and clear information on individual and average pay level, broken down by gender, for employees doing the same work as them or work for equal value to theirs.
- Pay Transparency prior to employment. Employers have the obligation to disclose any information related to the initial pay level or its range to potential candidates for the specific job vacancy. In addition, employers will not have the right to ask about their pay history of their former or current employment relationship.
- Transparency on pay level and career progression. Employers have to provide employees with a description of the pay and career progression criteria.
Furthermore, the Pay Transparency Directive provides for remedies and enforcement procedures such as the right to compensation to workers that have endured harm as a result of the pay discrimination within their workplace. It also offers protection for less favourable treatment or alienation measures.
It is also important to note that in cases of pay discrimination, the burden of proof is fully reversed, and it is upon employers to provide evidentiary facts that the alleged pay discrimination is falsely brought against them. Eurofast's legal and payroll experts can assist its clients and provide all the necessary practical information regarding the implementation of the Directive and the proactive measures that all employers are recommended to apply.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.