“No more excuses” on pay transparency, EU tells employers
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European Commission

Employers will be barred from asking job seekers about their pay history under new proposals from the European Commission designed to tackle the gender pay gap.

The EU executive’s draft rules aims to ensure pay transparency in organisations and better access to justice for victims of pay discrimination.

“Previous pay has no bearing on skills and the abilities of the applicant for work and that’s why we believe this must not be revealed if the employee does not want to,” Helena Dalli, European equality commissioner, told journalists ahead of the new proposals’ publication.

Under the new measures, employers will also have to provide information about the initial pay level or its range in the job vacancy notice or before the job interview.

Also, workers will have the right to request information from their employer on their pay level and the average pay levels, broken down by sex, for categories of workers within the company doing the same work or work of equal value.

Employers with at least 250 employees will be required to publish information on the pay gap between women and men in their organisation. For internal purposes, the commission recommends providing information on the pay gap between female and male employees by categories of workers doing the same work or work of equal value.

Where pay reporting reveals a gender pay gap of at least 5%, and when the employer cannot justify the gap on objective gender-neutral factors, organisations will be required to carry out a pay assessment in cooperation with workers’ representatives.

“Equal work deserves equal pay. And for equal pay, you need transparency,” said Ursula von der Leyen, president of the European Commission, who has made binding pay transparency measures a political priority of her presidency.

“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.”

The commission is also proposing that victims of pay discrimination recover full back pay and related bonuses or payments in kind in compensation. When disputes over pay occur, the employer will be required to prove no discrimination occurred.

“It is high time both women and men are empowered to claim their right,” said Vera Jourová, the commission’s vice-president for values and transparency.

“We want to empower job seekers and workers with tools to demand a fair salary and to know and claim their rights. This is also why employers must become more transparent about their pay policies. No more double standards, no more excuses.”

The commission said the new measures take into account the impact of covid-19 on employers but also on women who have been hit particularly hard by the pandemic.

Research shows that the outbreak of the novel coronavirus has reinforced gender inequalities and put women at greater risk of poverty exposure worldwide.

The gender pay gap across the EU’s 27-member bloc remains around 14%. On average, women’s pensions in the EU are 33% lower than men’s.

The annual cost of pay reporting for employers with more than 250 employees is estimated to be between €379 to €890.

Should the EU executive’s proposal be approved by the European Parliament and the EU Council, member states will have two years to incorporate the directive into national law.

The commission adopted a recommendation on strengthening the principle of equal pay between men and women through transparency in March 2014.

The EU’s parliament and council have repeatedly called for action in this area. In June 2019, the council called on the commission to develop concrete measures to increase pay transparency.

“The pay transparency proposal is a major step toward the enforcement of the principle of equal pay for equal work or work of equal value between women and men,’ said Dalli.

“It will empower workers to enforce their right to equal pay and lead to an end to gender bias in pay. Women deserve due recognition, equal treatment, and value for their work.”