Brussels, 6 December 2021
The Council today agreed on its position on a draft law on pay transparency which will help to tackle the existing pay discrimination at work and contribute to closing the gender pay gap. The proposed law aims to empower workers to enforce their right to equal pay for equal work or work of equal value between men and women through a set of binding measures on pay transparency.
There is simply no justification that women still earn much less than their male peers. With the agreement reached today in Council, the EU is taking a big step towards tackling pay discrimination and closing the gender pay gap. – Janez Cigler Kralj, Minister for Labour, Family, Social Affairs and Equal Opportunities
Increased pay transparency
Member states agreed that employers have to make sure their employees have access to the – objective and gender-neutral – criteria used to define their pay and career progression. In accordance with national laws and practices, workers and their representatives have the right to request and receive information on their individual pay level and the average pay levels for workers doing the same work or work of equal value, broken down by sex. Employers also need to indicate the initial pay level or range to be paid to future workers – either in the job vacancy notice or prior to the conclusion of the employment contract.
Employers with at least 250 employees have to provide, on an annual basis, information such as the pay gap between female and male workers in their organisation. Employers must share this information with their relevant national authority and may also make it publicly available. They also need to provide this information to their workers and their representatives.
In cases where this pay reporting demonstrates a difference in average pay level between female and male workers of at least 5% and the employer has not justified this difference by objective and gender-neutral criteria, employers with at least 250 workers will have to conduct a joint pay assessment in cooperation with their workers’ representatives.
Enforcement of rights
Member states need to ensure that judicial procedures are in place for workers who consider themselves wronged by a failure to apply the principle of equal pay. They also have to lay down rules on sanctions, which may include fines, if companies infringe any rights and obligations relating to the principle of equal pay.
The proposal for this directive was presented by the European Commission on 4 March 2021. As early as June 2019, the Council had called on the Commission to take measures to improve pay transparency.
The right to equal pay between women and men for equal work or work of equal value is enshrined in the Treaty of Rome and has been fleshed out in additional legislative texts. But despite this legal framework, the effective implementation and enforcement of this principle in practice remains a challenge in the EU.
The gender pay gap in the EU stands at around 14%; this means that women earn on average 14% less than men per hour. There are a number of inequalities underlying this pay gap. Women are overrepresented in relatively low-paying sectors such as care and education, the so-called glass ceiling leads to their underrepresentation in top positions, and in some cases women earn less than men for doing equal work or work of equal value.
Following the agreement between the member states, the Council can enter into negotiations with the European Parliament – once it has adopted its own position on the file – in order to agree on a final text.