Publications
14 June 2023
Salary transparency in the European Union
“Women earn on average 0.87€ for every 1€ earned by men”
According to the latest figures obtained by the European Commission the gender pay gap in the EU is 13%. This means that women earn on average 13% less an hour than men and have to work one and a half months longer to equal their annual earnings.
There are considerable gender pay gaps in the EU countries. Luxembourg, Romania, Slovenia and Italy have the lowest. But as a general rule, in most countries the gender pay gap has narrowed over the last ten years. However, since 2015, we have only achieved a decrease of 2.8%.
“Equal work deserves equal pay. And for equal pay, you need transparency. Women must know whether their employers treat them fairly. And when this is not the case, they must have the power to fight back and get what they deserve.” Ursula von der Leyen, President of the European Commission
Equal pay is a political priority for President Ursula Von Der Leyen, which has been worked on over the years with the creation of new legislation and monetisation of its implementation. The European Commission proposes measures for wage transparency and a mechanism to reinforce compliance with the right to equal pay for equal work, as well as rules that support a better work-life balance. It should be noted that, as of the year 2021, large companies were obliged to follow the directive for gender balance in corporate boards, allowing women to assume positions of great responsibility alongside the opposite sex.
Pay transparency and equal pay
Equal pay for equal work, or work of equal value between women and men, has been a right in the EU since 1957, but it has not been upheld by some European organisations. In order to combat this problem, the European Commission has put in place a number of pay transparency measures and a mechanism to enforce this right.
Wage transparency measures:
- Employers will have to provide information about the starting pay level, or the corresponding range, in the job offer or before the job interview and will not be able to ask potential employees about their pay background.
- Workers will have the right to request information from their employer on their individual level of remuneration and on average levels of remuneration, broken down by sex, categories of workers doing the same work or work of equal value.
- Employers with at least 250 employees shall publish information on the pay gap between employees in their organisation. Internally, they must also provide information on the pay gap between male and female workers by categories of workers performing the same work or work of equal value.
- If the information on pay reveals a pay gap of at least 5%, which the employer cannot justify on the basis of objective, gender-neutral factors, employers will have to carry out a pay review in cooperation with workers’ representatives.
Work-life balance
Following the repeal of the Maternity Leave Directive , the European Commission has decided to adopt a broader approach to address the under-representation of women in the labour market by creating the “Work-life Balance” initiative. This initiative allows parents and persons with care responsibilities to better reconcile their professional and family life and to encourage a better division of care responsibilities between women and men.
Legal action:
- Introduction of paternity leave. Fathers will be able to take at least 10 working days of paternity leave at the time of the child’s birth, compensated at least at the level of sickness benefit.
- Strengthening of the existing right to 4 months parental leave by making 2 of the 4 months non-transferable from one parent to the other, and compensated at a level to be defined by Member States. Fathers will also have the right to request to take leave in a flexible way (e.g. part-time or piecemeal).
- Introduction of carer’s leave for workers who provide personal care or support to a family member or person living in the same household. Working carers will be able to take 5 days off per year.
- Extending the existing right to request flexible working (reduced hours, flexitime and flexibility in the workplace) to all working parents of children up to at least 8 years old and to all parents with children in education.
Gender balance on boards of directors
Few women take the top jobs. Less than a third of board members in the EU’s largest companies are women, although 60% of university graduates are female.
The new Directive set a target for large listed companies in the EU to accelerate progress towards gender balance. By 30 June 2026 , there would have to be at least 40% women among non-executive board members or 33% among company directors.
Companies with a lower quota will be obliged to make appointments on the basis of a comparative analysis of the candidates’ qualifications, applying clear, neutral criteria so that they are assessed objectively on their individual merits, regardless of gender. The reasons and the measures they are taking to address this shortcoming should also be communicated.
Member states’ sanctions for companies that fail to comply with selection and reporting obligations may include fines and the annulment of the contested director’s appointment. In addition to this, member states will also publish the information on companies that fail to meet the targets.
Justice for victims of pay discrimination
Workers who have suffered pay discrimination on the grounds of gender may be able to obtain compensation, including full repayment of wages and related bonuses or payments in kind. It will be for the employer, rather than the employee, to prove that there has been no discrimination in pay. Equal treatment bodies and workers’ representatives may engage in judicial or administrative proceedings on behalf of workers, as well as bring collective actions on equal pay.
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