Brussels, 17 March 2022
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Compulsory reporting on gender pay gap for companies
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Pay secrecy in work contracts to be prohibited
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Working women in the EU earn on average 14% less than men
The Women’s Rights and Employment committees want EU companies with at least 50 employees to be fully transparent regarding their salaries.
On Thursday, the committees on Women’s Rights and Employment adopted by 65 votes in favour, 16 against and 10 abstentions, their position on the Commission proposal on a Pay Transparency Directive.
MEPs demand that EU companies with at least 50 employees (instead of 250 as originally proposed) be required to disclose information that makes it easier for those working for the same employer to compare salaries and expose any existing gender pay gap within the organisation. Tools to assess and compare pay levels should be based on gender-neutral criteria and include gender-neutral job evaluation and classification systems.
If the pay reporting shows a gender pay gap of at least 2.5% (versus 5% in the initial proposal), member states would need to ensure that employers, in cooperation with their workers’ representatives, conduct a joint pay assessment and develop a gender action plan.
The Commission should create a dedicated official label to award to employers who do not have a gender pay gap in their companies, MEPs add.
Prohibit pay secrecy
The text stipulates that workers and workers’ representatives should have the right to receive clear and complete information on individual and average pay levels, broken down by gender. MEPs also propose to prohibit pay secrecy, via measures forbidding contractual terms that restrict workers from disclosing information about their pay, or from seeking information about the same or other categories of workers’ pay.
Shift of burden of proof
MEPs uphold the Commission proposal regarding the shift of burden of proof. 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.
Quotes by the rapporteurs
Samira Rafaela (Renew Europe, NL), of the Women’s Rights and Gender Equality Committee, said: ‘‘Today we are a step closer to getting rid of the gender pay gap in Europe. In Parliament, we have tried to strike the right balance between ensuring the right to information for female employees and limiting unnecessary burdens on companies. This way we can make equal pay for equal work a reality for as many women in Europe as possible.’’
Kira Marie Peter-Hansen (Greens/EFA, DK), of the Employment and Social Affairs Committee, said: ‘‘With this Directive, we are taking an important step towards gender equality, and shining a light on the problem of unequal pay. It is not only a strong signal stating that we will no longer accept gender-based pay discrimination, but it is also a toolbox to help member states and employers eliminate their gender pay gap in general.’’
Next steps
MEPs on the Women’s Rights and Employment committees approved the decision to enter into inter-institutional negotiations by 71 votes in favour and 20 against. The Parliament as a whole is expected to vote on that decision during the 4-7 April plenary session. The Council already adopted its position last December.
Background
The principle of equal pay is laid down in Article 157 TFEU. However, across the European Union, the gender pay gap persists and stands at around 14%, with significant variations among member states; it has decreased only minimally over the last ten years.
Further information
Renew Europe: Pay Transparency will help end the unjustified pay gap between men and women
Date:
A vital step has been taken to end the unjustified gender pay gap today. The European Parliament’s Committees on Women’s Rights and Gender Equality (FEMM) and Employment and Social Affairs (EMPL) have adopted a legislative report on how to strengthen the principle of equal pay for equal work through pay transparency.
The report seeks to foster pay transparency by providing all workers with the right to information and to ask employers with at least 50 workers to disclose important elements of their workers’ pay, such as the gender pay gap, to facilitate the comparison of salaries between employees. Not only does the report aim to better detect pay discrimination in certain companies but also to better assess the value of work, especially in undervalued and female dominated sectors and, to efficiently remedy any unjustified gender pay gap.
Renew Europe is a firm defender of gender equality and believes that access to information on pay is an essential corner stone in combating pay discrimination and accomplishing the EU’s core principle of equal pay for equal work.
MEP Samira Rafaela (Democraten 66, Netherlands), the FEMM Committee rapporteur on the report, reacts:
“Today we are moving one step closer to finally eradicating the gender pay gap in Europe. In this report of the European Parliament, we have done our best to strike the proper balance between ensuring the right to information for female employees and limiting unnecessary burdens on companies. By adopting this report, we can soon make equal pay for equal work a reality for women everywhere in the EU.”
Renew Europe’s position in the negotiations has been, on the one hand, to limit the administrative burden on companies, in particular for micro and small enterprises, while on the other hand, promote increased pay transparency and the fight against gender pay discrimination.
MEP Sylvie Brunet (Mouvement Démocrate, France), shadow rapporteur on the report in the EMPL Committee, says:
“I am very glad this legislative report on the Pay Transparency Directive is now adopted. It is a step further towards the implementation of the European Pillar on Social Rights and the elimination of pay discrimination in Europe. It is time the right to equal pay for work of equal value becomes a reality. With this directive we will get an efficient tool to detect unjustified gender pay gaps, to remedy them and take corrective actions where needed to ensure that women in Europe do not lag behind anymore.”
Another critical element that our political group pushed for is broadening the scope by going beyond the gender element. This way, the directive has a gender-sensitive approach and embraces a broader spectrum of potential discrimination.
To conclude, the principle of equal pay for equal work has been enshrined in the EU Treaties since 1957, yet it is still far from reality sixty-five years later. Men in the EU earn on average 14% more than women for the equivalent type of work, leading to serious socio-economic consequences. The Pay Transparency Directive is an important puzzle piece in overcoming the structures that cause unjustified pay gaps, reinforcing the principle of equal pay and closing the gender pay gap.
Source – Renew Europe