ARTICLE
19 September 2022

Equal Pay Day 2022: What's Happening With The Gender Pay Gap?

IL
Ius Laboris

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International Equal Pay Day falls on 18 September. It's a moment to reflect on what has been achieved and what still needs to be done to address pay equity globally.
Worldwide Employment and HR
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International Equal Pay Day falls on 18 September. It's a moment to reflect on what has been achieved and what still needs to be done to address pay equity globally. Here Ius Laboris lawyers from across the alliance provide a round-up of new measures and proposals to address the gender pay gap in their countries.

The 'Gender Pay Gap', as defined by Eurostat, is the difference between the average gross hourly earnings of male and female paid employees as a percentage of average gross hourly earnings of male paid employees.

Various factors can contribute to the gender pay gap. They include:

  • The different amount of work performed: the average number of days or hours worked by men is greater than that of women as women often have part-time contracts allowing them to take care of family duties.
  • Women having a shorter working life than men: women's working careers suffer on average more interruptions (often linked to the contemporary need for childcare and assistance to the elderly) and, therefore, end up being shorter on average. Long periods out of the labour market due having and taking care of children can be an obstacle that decreases the possibility of reaching managerial positions.
  • Strong segregation between professional positions: female employment in various countries is still concentrated in sectors where wages are lower and where the role of collective bargaining is also less relevant (e.g. the housekeeping and caring sector, which makes up an important share of female employment).
  • Discrimination pure and simple: women, regardless of whether they have children or not, are paid less than men because many companies believe that they are potentially less productive due to hypothetical absences from work because of caring responsibilities.

The COVID-19 pandemic has not helped: women are employed in the sectors most affected by the pandemic and the burden of increased need for family care caused by the emergency has mainly fallen to them.

Based on the Global Gender Gap Report of 2022 (published on the World Economic Forum) in 2022, the global gender gap has been closed by 68.1% and at the current rate of progress, it will take 132 years to reach full parity. Although this figure does not appear reassuring, it does represent a slight four-year improvement compared to the 2021 estimate (136 years to parity).

Many countries have recently introduced new measures or adapted existing ones to try to reduce the gap.

Reporting obligations

Obligations to report the status of the gender pay gap have been introduced in many countries (both within the EU and outside) and the existing ones have been extended. Indeed, even though reporting does not itself reduce the gap, it is critical for companies to collect detailed figures on the salary situation in order to investigate reasons for differences and to start identifying solutions. However, generally, reporting obligations do not come with mandatory actions to close the gap.

In Portugal, in 2019 a law was enforced to actually promote equal pay between genders. The law requires all organisations to have a transparent salary policy, based on evaluation of the roles and on objective criteria, common to both genders, such as productivity or length of service. Organisations must report salaries annually in a Social Report that includes other information on employees. If discrepancies on gender pay are found, the organisation will be notified to either correct them or explain if there are objective reasons for such differences.

In Italy, law no. 162 of 5 November 2021 establishes that every two years, companies that employ more than 50 employees must prepare a report on the situation of male and female personnel and send it to the Ministry of Labour, the RSA, the Regional Councilor for Equality and the Department of Equal Opportunities of the Presidency of the CdM. Companies that do not comply with these obligations are given 60 days to do so. Failing this, an administrative sanction from EUR 515 to 2,580 will be imposed and, if the failure to comply lasts for more than 12 months, there is scope to suspend any contributory benefits for one year.

In Spain, all employers are obliged to implement and keep a 'salary/remuneration record' of the average values of salaries, salary supplements and non-salary payments to staff, disaggregated by sex and distributed by professional groups, professional categories or job positions of equal value. This obligation applies to all employers regardless of how many employees they have. If in an organisation employing at least 50 employees the average remuneration of employees of one sex is 25% or more higher than the remuneration of employees of the other sex (the total wage bill or the average of the payments made will be considered), the organisation must include a justification why the salary difference is due to reasons unrelated to the employees' gender in the salary/remuneration record.

Employees can have access to the information in the salary/remuneration record through their representatives. Since 14 April 2021, if no employees' representative exist in the organisation, employees can only access some specific information in the salary/remuneration record.

Failure to comply with this formal obligation is a serious labour infringement and the Work Inspectorate could impose a fine of between EUR 751 and EUR 7500 on the organisation. If the Work Inspectorate verifies that no salary register has been implemented (despite this being mandatory) and the organisation is found to discriminate on the basis of gender, the Work Inspectorate could impose a fine in a range between EUR 7500 and EUR 225,008.

The Labour Ministry has developed a online salary/remuneration record tool compliant with Spanish law which is accessible here.

In France, a law of 27 December 2021 has furthered the French government's objective of equal pay for women and men by extending disclosure requirements regarding the gender pay gap. In particular, since 1 March 2022, all companies with at least 50 employees have to publish the following information on the organisation's website and report it to the Ministry of Labour:

  • the gender equality index (score) and the results obtained for each of the indicators used to determine the index (4 or 5 depending on the size of the organisation); and
  • the corrective measures and, where applicable, the annual or multi-year programme of financial measures to catch up on salaries (when the overall score obtained for the index is below 75 points out of 100) and the improvement targets (when the overall score obtained for the index is below 85 points out of 100) that the organisation has set out in an agreement or action plan.

The defined corrective measures and improvement targets must also be made known to the employees.

In Norway, all public undertakings, regardless of size, and private undertakings that ordinarily employ more than 50 individuals have a duty to map wage statistics, every other year, on the basis of gender as well as the extent of involuntarily part-time work.

In Romania, employers with over 50 employees must designate an employee or appoint an expert with responsibility for gender equality matters. These individuals have a wide range of duties, including elaborating action plans on the implementation of the principle of equal opportunities for women and men (which include measures on eliminating gender disparities). To do so, they may ask to collect and analyse data and information on equal opportunities and equal treatment of women and men in the organisation.

As far as reporting obligations are concerned, the above are only examples of the existing reporting obligation. The Ius Laboris' map on reporting obligation concerning the gender pay gap shows the current status across the world.

Certification

Other countries have introduced a certification system to indicate organisations' commitment to reducing the gender gap in the workplaces. This is the case in Italy: Gender equality certification took effect from 1 January 2022. It certifies the policies and concrete measures adopted by employers to reduce the gender gap in relation to growth opportunities in the organisation, wage equality and maternity protection.

Organisations that obtain the so-called 'pink sticker' ('bollino rosa' representing the certification) can enjoy a number of benefits. In particular:

  • Exemption from the payment of employer's social security contributions, up to a limit of EUR 50 million. This exemption is determined to an extent not exceeding 1% and up to a maximum of EUR 50,000 per year per organisation.
  • For state aid project proposals, an award score is recognised and taken into consideration by authorities holding European, national and regional funds.
  • An award score is recognised and taken into consideration in the evaluation, by the contracting authorities, of toffers submitted following the publication of calls for tender, notices or invitations relating to procedures for the acquisition of services, supplies and works.

The Luxembourg government has set up a programme called 'Actions Positives' which allows organisations to give equality measures formal status and have them certified. Within the framework of this programme, the Luxembourg government has also made the Logib-Lux salary self-evaluation software available to organisations employing more than 50 employees. This tool provides these organisations with a report that addresses gender-based pay structures within the organisation, examines the causes and indicates ways to improve equal pay.

For companies with fewer than 25 employees, the Luxembourg government has made available a guide for equal pay between women and men at work. This guide offers tools to enable these employers to guarantee a long-term equal pay policy between employees.

Targeted programmes or organisations

The introduction of specific entities or programmes to tackle the gender pay gap is another approach.

In Austria, a new initiative was introduced in spring 2022: the Austrian Women's Fond 'LEA – Let's Empower Austria'. Its aim is to improve gender equality, and tackle the gender pay and gender pension gap. Furthermore, it seeks to make STEM professions (i.e. science, technology, engineering and mathematics) more attractive to women, as they are especially underrepresented in this field despite the fact that the sector offers sought-after and rather well paid professions.

At LEA, people work to break stereotypes and ensure that women and girls can exercise their right to equal opportunities by advancing women-specific causes and bringing strong role models to the stage. In collaboration with actors from fields such as education, science, business, health, sports, and politics, LEA advocates for decisive and authentic equality for women and girls. LEA mainly provides input via workshops and presentations for women.

Since 2020 Greece, complying with the UN's initiative and the EU's strategic plans, has launched the SHARE Programme that promotes the equality of the sexes and the adoption of good practices for balancing work and private life through workshops and seminars. Through this Programme, interested organisations may apply (by submitting concrete data) for an Equality Badge (sima isotitas) certifying that they promote equality of sexes in all aspects and that they have implemented practices and systems in their business to ensure equality. To date, after evaluation of' applications by organisations interested in being awarded the Equality Badge, 18 have been awarded for a period up to January 2024. Organisations that have been awarded an Equality Badge need to submit a report each year to the authorities to assess if they are qualified to retain the Equality Badge. Currently, the second stage of the Programme is pending.

In Ukraine, within the framework of the international Biarritz Partnership initiative, the government has defined obligations to reduce the wage gap between women and men, to develop an inclusive and gender-sensitive public space.

The plan of measures to implement Ukraine's obligations under the Biarritz Partnership" to establish gender equality, provides, in particular, for the adoption and implementation of National Strategy on reducing the gender pay gap for the period until 2023, as well as ensuring that Ukraine meets the membership criteria for the Equal Pay International Coalition (EPIC). The Ministry of Economy of Ukraine has already developed a draft of this Strategy.

In addition, as a member of 'Economic Justice and Rights', the Ukrainian Government, undertook to develop and adopt a law 'On Equal Remuneration for Work of Equal Value' to reduce the gender gap in the wages of women and men by up to 16% by 2026. In May 2021, the Ministry of Economy initiated the development of of a draft Law to this effect.

To increase employers' awareness of ways to ensure equal rights and opportunities for women and men in labour relations (reduction of the wage gap between women and men; combating discrimination based on gender), an Order was issued by the Ministry of Social Policy dated 29 January 2020 approving methodological recommendations on the inclusion of provisions in collective agreements and agreements aimed at ensuring equal rights and opportunities for women and men.

On 12 August 2022, despite the hard times Ukraine is facing, the Ukrainian Cabinet of Ministers issued an Order approving the state strategy for ensuring equal rights and opportunities for women and men up to 2030 and approving operational plan for its implementation for 2022-2024. Ine of the operational goals is to create conditions for ensuring equal economic opportunities for women and men by (reducing the gender gap in wages for women and men, reducing the level of horizontal and vertical gender segregation of the labour market; and creating conditions for expanding women's economic activity, especially those ages 25-29, among other measures).

In the Czech Republic the Action Plan for equality between women and men 2019-2020 has been replaced with the Gender Equality Strategy 2021-2030. This which has been followed up with the Concept for ensuring equal opportunities for women and men in the MIT for 2021-2030. The Concept is focused on the Ministry of Industry and Trade, builds on current activities in the area of promoting gender equality between employers and employees and aims to ensure the implementation of the principles set out in the Gender Equality Strategy 2021-2030.

Kazakhstan has developed a family and gender policy until 2030. In the course of implementation of this document, the following amendments to the Labour Code were introduced:

  • In 2020: providing for a right to part-time work for pregnant women, one adoptive parent of a child (or children) under three, as well as employees caring for a sick family member.
  • In 2021: cancellation of the list of jobs where the use of women's labour is prohibited (the decision to cancel takes effect progressively and is aimed at ensuring equal rights and equal employment opportunities for men and women.

In Romania, in the context of implementing the National Strategy on social inclusion and poverty reduction for 2022-2027, government analysis has led to observations on existing gender disparities in terms of workforce and work opportunities, despite an employment rate close to 70%.

With the aim of improving work conditions and alleviating unjustified gender-based disparities, actions are being proposed to promote equal opportunities and equal treatment with a view to eliminating gender-based discrimination, bullying and sexual harassment in the labour market. Ensuring a high percentage of the population is educated on the legal framework around discrimination, harassment, and violence is key in this strategy. These initiatives will be organised by the authorities with responsibilities in this field, including the National Agency for Equality of Chances between Women and Men, the Ministry of Labour and Social Protection.

Representation and quotas

Addressing the female representation gap and introducing quotas among senior executives and on the management bodies of organisations may also help to reduce the gender gap.

In France, the law of 27 December 2021 introduced a 'quota' mechanism: the proportion of individuals of each sex among senior executives and members of t management bodies may not be less than 30% as of 1 March 2026 and 40% as of 1 March 2029. An organisation which does not comply with the quota will have two years to implement corrective measures and comply. The organisation will have to publish progress targets and corrective measures after one year. After that, if the results obtained are still below the set rate, the employer may be subject to a financial penalty of up to 1% of the annual payroll.

In addition, from 1 September 2022, these organisations have to publish gender representation gaps among senior executives and members of the company's management bodies on their website (updated each year) and report to the Ministry of Labour, which will publish all the results.

In Italy, there is the obligation for listed companies to appoint directors on the basis of criteria that ensure gender balance; this obligation has now been extended (by law no. 162 of 5 November 2021) to organisations controlled by public bodies.

Family support measures

Measures to reduce the gap between women and men's career progressions may extend. beyond employers and the workplace, and may include actions designed to support people taking care of their families.

Germany has recently focused primarily on expanding childcare. Parental benefits have been adjusted, creating financial incentives for families to share childcare work equally. Financial incentives are also being created for a quick return to work.

Proposals

The measures described above have been already introduced, but many more are yet to come: there are multiple legal proposals which look forward to being approved.

In Belgium, in 2019, three bills to amend the Gender Pay Gap Act were introduced by MPs from socialist and green parties. The proposals included:

  • making action plans mandatory when an organisation's pay structure is unequal;
  • making the appointment of a mediator mandatory;
  • publishing company analysis reports on a website; or awarding a label based on these analysis reports and making these labels publicly accessible;
  • explicitly including the principle of equal pay for work of equal value in the Gender Act; and
  • a five-yearly review of the wage gap law.

In the Netherlands in 2019, a legislative proposal was initiated concerning equal pay for men and women. In 2020, the proposal was amended based on advice given on the proposal by the Advisory Division of the Council of State. The legislative proposal is still being debated (most recently on 9 August 2022) and has not been agreed upon by the House of Representatives yet. The proposal aims to amend the Dutch Law on Equal Pay for Men and Women and includes:

  • Reporting obligations: Organisations must report on differences in remuneration between female and male employees who perform work of equal value in the board report. If there is a difference between remuneration, an explanation of this must be given and the report must outline what efforts are being made to promote equal pay. Moreover, if there is a works council, the employer must provide the works council with data concerning the differences in remuneration between female and male employees who perform work of equal value at least once a year.
  • Employee information right: Employers with at least 50 employees must, at the request of an employee, give access to the anonymised data on the wages of other employees who perform work of equal value within the organization.
  • Certificate system: Employers with at least 250 employees must be in possession of a certificate which shows that they are compliant with the rules concerning equal pay (equal pay for work of the same value). The certificate can be requested and obtained for a period of three years. After the three years, a request for the extension of the certificate period must be submitted. Employers with fewer than 250 employees can also submit a request for a certificate, however, they are not obliged to do so.
  • Burden of proof: If an employee claims that there is the case of unequal pay, and the employer is not in the possession of the certificate described above, the burden of proof is on the employer to prove that this is not the case.
  • Sanctions: If organisations do not comply with the rules, an administrative penalty could be imposed.

Brazil has many proposed bills with the purpose of reducing gender pay gap. These include:adding an article in the Brazilian Labor Code to provide for equal pay for men and women (PL 1230/2020); establishing tax incentives for hiring women in the formal labour market (PL 324/2022); and requiring organisations with more than 30 employees maintain a programme to promote gender, colour and ethnic equality (PL 1126/2019).

Most changes currently implemented or under discussion in Brazil arise from initiatives without a legal obligation, especially the implementation of an ESG agenda by many organisations.

In Chile, a bill regarding the gender pay gap is currently being discussed in Congress. If approved, this legislative proposal would mean that wage differences between men and women of more than 20% must be considered arbitrary if the employer does not prove otherwise. If the gap is found to be arbitrary, this could lead to potential litigation in the Labour Courts. In addition, under the bill, a claim could be triggered by a male or female employee or by the union to which the affected employee is affiliated.

In Mexico, in March 2022, the Gender Equality Commission of the Lower Chamber unanimously approved the bill to amend the General Law for Equality between Women and Men in the area of remuneration and the General Law for Women's Access to a Life Free of Violence, with the aim of promoting equal pay for women and men. This ruling will oblige the Mexican state to prepare public policies aimed at ensuring that employers enforce the principle of equal pay for equal work. It is pending to be discussed and approved by the Lower Chamber of Congress.

Conclusion

Recent years have been full of new measures and actions aimed at reducing gender gap and we can only anticipate that many more will be introduced in order to reach full parity as soon as possible or at the very least, sooner than 132 years from now.

Contributors

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.

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