Brussels, 15 December 2022
The S&D’s long-standing demand to have strong, binding EU rules on pay transparency is finally coming true with a deal reached today by negotiators from the European Parliament and the Council.
After five rounds of trilogues, they agreed on the main points of the Directive on Pay Transparency – a first and necessary step to end pay differences between men and women which still remain too high. On average, women in the EU earn 14.1% less than men in comparable positions.
According to the agreement, all workers in all companies – no matter the size of the company – will have the right to annually receive information on the level of pay of workers who are performing the same work, or work of equal value within the company. Recruiters will be forbidden from asking candidates about their current pay. This will help to break the pattern of pay inequalities.
S&D negotiators Evelyn Regner and Marc Angel secured strong provisions on penalties and fines for non-compliance which will be key in ensuring that companies actually take the new pay transparency rules seriously. S&D also reinforced the role of social partners in the implementation of the Directive. Finally, to fight the systematic lower pay in female-dominated sectors, the S&D negotiators insisted on provisions allowing cross-sector comparisons and the collection of more data.
Evelyn Regner MEP, S&D negotiator on pay transparency in the women’s rights and gender equality committee, said:
“Today is a good day, not only for women but for all workers! With the new law, we are a step closer to finally closing the gender pay gap, and making sure Europeans receive equal pay for equal work, or work of equal value.
“We, the Socialists and Democrats can be really proud, because not only have we fought for this Directive for such a long time, but we also managed to considerably improve the Commission’s proposal by strengthening workers’ rights.
“For us, it was also crucial that the burden to close the gender pay gap lies on companies and member states, rather than on workers, mostly women, who have to go to court to prove pay discrimination. All workers will be able to share information on their pay internally and externally. This means the effective ban of pay secrecy clauses. We also secured the rights of Trade Unions to collective bargaining and the involvement of social partners.”
Marc Angel MEP, S&D negotiator in the employment and social affairs committee, said:
“The agreement reached today will make a real difference, because transparency is key in the fight for equality! Currently a large majority of EU countries have no legal framework on pay transparency.
“As S&Ds, we wanted all companies – no matter their size – to be included in the whole scope of the Directive, meaning that all companies must report and take remedial measures if a gender pay gap exists. This was not possible. Yet, we significantly lowered the threshold from originally covering companies from 250 workers and upwards to now only 100*.
“Nevertheless, we did secure that other tools in the Directive apply to all companies. I am also proud of the gender-neutral language which we were able to include for the first time in a Directive so that it applies to all workers in all their diversity.”
Note to editors
According to the agreement, companies with at least 100 employees (instead of 250 as originally proposed by the Commission) will have to report information to a monitoring body and inform its own workers. This makes it easier for those working for the same employer to compare salaries and expose any existing gender pay gap in their organisation. If pay reporting shows a gender pay gap of 5% or more, member states will have to ensure employers, in cooperation with their workers’ representatives, conduct a joint pay assessment to remedy any pay gap. If this is not done, penalties including fines will be imposed.
Source – S&D Group – Email
Gender pay gap: deal reached on binding pay-transparency measures
Brussels, 15 December 2022
EU companies will be required to disclose information on salaries to expose existing gender pay gaps.
According to the agreement reached by EP and EU countries’ negotiators on Thursday, EU companies will be required to disclose information that makes it easier to compare salaries for those working for the same employer and expose existing gender pay gap.
Pay structures to compare pay levels should 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. 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.
Prohibit pay secrecy
The provisional agreement stipulates 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.
Shift of burden of proof
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.
Quotes by the rapporteurs
Samira Rafaela (Renew Europe, NL), of the Women’s Rights and Gender Equality Committee, said:
“Finally we have secured binding legislation that tackles pay discrimination across the EU. This modern, inclusive and rights-based Directive is a testament of the European Parliament standing up for its citizens. For the first time, we have included the recognition of intersectional discrimination and have explicitly included non-binary persons. We are now one step closer to realising true gender equality in our Union.”
Kira Marie Peter-Hansen (Greens/EFA, DK), of the Employment and Social Affairs Committee, said:
“Today’s deal shows the EU won’t accept gender-based pay discrimination. Parliament pushed for more workers to have their right to equal pay and pay information and for more companies to be transparent about the pay gap. Historically, women’s work has been undervalued and underpaid. Pay transparency does not eradicate all kinds of discrimination, but it can shed light on the pay gap and ensure that action is taken where it’s needed.”
Next steps
Parliament and Council will have to formally approve the agreement. The new rules will come into force twenty days after their publication in the EU Official Journal.
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 13%, with significant variations among member states; it has decreased only minimally over the last ten years.
Source – EU Parliament