Europe is following in the footsteps of the US, and moving towards pay transparency. The European Union’s Parliament has approved new rules that will increase pay transparency and help to close the gender pay gap.
The new legislation aims to end pay secrecy, giving workers the right to access information on pay in their category of work. EU companies will have to disclose information that makes it easier for employees to compare salaries and expose existing gender pay gaps. Europe’s gender pay gap currently stands at around 13%, with significant variations among member states.
The rules, adopted on Thursday (30 March 2023), stipulate that workers and workers’ representatives will have the right to receive clear and complete information on individual and average pay levels, broken down by gender. Pay secrecy will also be banned. In short, contracts will no longer be able to restrict workers from disclosing their pay, or from seeking information about the same or other categories of workers’ pay.
Additionally, under the new rules, pay structures to compare pay levels will have to be based on gender-neutral criteria. This includes gender-neutral job evaluations and classification systems. Vacancy notices and job titles will also have to be gender neutral and recruitment processes led in a non-discriminatory manner.
BURDEN OF PROOF SHIFTS TO THE EMPLOYER
The burden of proof regarding pay-related issues will shift from the worker to the employer. In cases where a worker feels that equal pay has not been applied and takes the case to court, the onus will be on the employer to prove there was no discrimination. Additionally, if pay reporting shows a gender pay gap of at least 5%, employers will have to conduct a joint pay assessment in cooperation with their workers’ representatives. Member states will also have to put in place effective, proportionate and dissuasive penalties; such as fines, for employers that break the rules.
“This legislation makes it crystal clear that we do not accept any kind of gender pay discrimination in the EU. Historically, women’s work has been undervalued and underpaid. With this directive we take an important step to secure equal pay for work of equal value,” stated EU Danish politician Kira Marie Peter-Hansen, part of the Employment and Social Affairs Committee who worked on the new legislation.
TACKLING INTERSECTIONAL DISCRIMINATION
It’s the first time that intersectional discrimination and the rights of non-binary persons have been included in the scope of the EU rules. “My priority was to ensure the most inclusive and impactful pay transparency measures for workers. Not only do we finally have binding measures to tackle the gender pay gap, but also all citizens of the EU are empowered, recognised and protected against pay discrimination,” stated Dutch EU politician Samira Rafaela, from the EU Women’s Rights and Gender Equality Committee; who also worked on the new legislation. “Non-binary people have the same right to information as men and women. I’m proud that with this Directive, we have defined intersectional discrimination for the first time in European legislation and included it as aggravating circumstances when determining penalties.”
The EU Parliament will now have to formally approve the agreement before the legislation officially becomes law.
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