Gender pay inequality in the workplace is still a persistent social problem. Even though the fight for equal pay for equal work, or work of equal value, has been going on for decades, progress has been slow. Recent developments and adoption of the EU Pay Transparency Directive by the European Parliament indicate that a change is on the horizon.
EU Pay Transparency Directive
Directive 2023/970, which strengthens the application of the principle of equal pay for men and women for the same work or work of equal value through pay transparency and enforcement mechanisms, is valid and effective from July 2023. Companies established in an EU member state with at least 100 employees will be subject to these requirements.
Implications for employers and employees:
Reporting on the gender pay gap
- mandatory for companies with 100+ employees
- joint pay assessments carried out in cooperation with employees´ representatives, applicable to companies where the difference in the average pay level between male and female employees is 5% or more
Recruitment of employees
- transparency of pay information prior to employment
- ban on asking applicants about their pay history
Pay philosophy
ensuring transparency of criteria used to determine employees´ pay and career progression
Average pay levels
employees´ right to request information on their individual pay level and the average pay levels of employees performing the same work, broken down by gender
Remedies and enforcement of remedies
stipulation of remedies and enforcement mechanisms, such as compensation for damage, shift of burden of proof, protection from victimization and sanctions for non-compliance
What does this mean for you?
The EU Pay Transparency Directive will impact almost all employers operating in the EU, and its consequences will be reflected in the entire life cycle of an employee.
- July 2023 Validity and effectiveness of the directive
- September 2023 Start of transposition of the directive into national legislations
- June 2026 End of the transposition deadline
- June 2027 Start of obligations for employers to provide specified information
Meeting all the requirements of the Directive will mean modification of many HR processes at companies. We recommend a preliminary GAP analysis of the requirements of the Directive as a first step. This will give you an overall idea of which processes need to be addressed. We recommend undertaking such an analysis as early as possible, as other legislative regulations also introduce the reporting of data related to fair remuneration, and a timely GAP analysis will save you work by avoiding having to implement individual requirements separately.
We Will Support You in Meeting the Requirements of the EU Pay Transparency Directive and Strengthen Your Compensation Processes
Readiness Check for the EU Pay Transparency Directive
Our service will help you assess how prepared your company is for the new pay transparency directive. We will provide you with a detailed analysis and recommendations that will enable you to meet all requirements and avoid possible penalties.
Training: Putting the EU Pay Transparency Directive into Practice
Join us on December 3, 2024, as we delve into the issue of pay differences and the importance of this directive, and we will provide you with the key information needed to implement the directive's requirements in your company.
Help-Line on Transparent Pay for Men and Women
We provide phone or email support for questions about implementing the principles of equal pay for men and women within company processes, analyses, and enforcement mechanisms of the EU pay transparency legislation.
Contact us
