EU Parliament Adopts New Rules on Binding Pay-Transparency Measures

EU Parliament Adopts New Rules on Binding Pay-Transparency Measures

New legislation adopted by the European Parliament will require EU companies to disclose information that makes it easier for employees to compare salaries and to expose existing gender pay gaps.

Under the rules, pay structures to compare pay levels will have to be based on gender-neutral criteria and include gender-neutral job evaluation and classification systems. Vacancy notices and job titles will have to be gender neutral and recruitment processes led in a non-discriminatory manner.

According to a statement from the EU Parliament:

  • Women in the EU on average earn 13% less than men for doing the same job
  • Workers will now have the right to information on pay in their category of work, ending pay secrecy
  • Dissuasive penalties, including fines, for employers that do not comply with the rules are to be introduced
  • Companies will have to act if their gender pay gap is over 5%

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 have to put in place effective, proportionate and dissuasive penalties, such as fines, for employers that infringe the rules. A worker who has suffered harm as a result of an infringement will have the right to claim compensation. For the first time, intersectional discrimination and the rights of non-binary persons have been included in the scope of the new rules.

The rules also 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 be banned; there should be no contractual terms that restrict workers from disclosing their pay, or from seeking information about the same or other categories of workers’ pay.

On pay-related issues, the burden of proof will shift from the worker to the employer. In cases where a worker feels that the principle of equal pay has not been applied and takes the case to court, national legislation should oblige the employer to prove that there has been no discrimination.

Samira Rafaela of the Women’s Rights and Gender Equality Committee, said, ‘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…’

The Council will have to formally approve the agreement before the text is signed into law and published in the EU Official Journal. The new rules will come into force twenty days after their publication.

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Antoinette Tyrrell is a writer and journalist who started her career in print and broadcast journalism in Ireland. An English and History graduate of the National University of Ireland, Maynooth, she worked for 11 years in corporate public relations for Irish Government bodies in the Foreign Direct Investment and Energy sectors.

She is the founder of GoWrite, a business writing and public relations consultancy. Her work has appeared in a range of national and international media and trade publications. She is also a traditionally published novelist of commercial fiction.

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