The European Parliament adopts proposed directive on pay transparency
The proposed directive, which is aimed at ensuring equal pay for men and women, is awaiting adoption by the Council of the European Union
The European Parliament has adopted the proposed directive aimed at closing the gender pay gap in the EU. For example, the proposal focuses on gender neutrality in job advertisements and job titles, accounts of pay gaps between men and women, and transparency in organisations regarding pay levels. The latter aims, among other things, to give workers access to information that can provide a relevant basis for comparison and thus improve the possibility of claiming equal pay for equal work or work of equal value.
Rights and obligations under the directive
The proposed directive contains a number of rather far-reaching measures aiming to reinforce the principle of equal pay for men and women performing the same work or work of equal value. Such measures include the following:
- Pay structures
Employers must have pay structures enabling workers to compare pay levels.
- Pay transparency
Information on the pay for the position must be provided to job applicants in the job advertisement or otherwise provided prior to the job interview. The information must be given in a way that ensures balanced and fair negotiations regarding pay. In addition, workers must have easy access to the criteria used by employers with more than 50 employees to determine pay levels.
- Gender neutrality
Employers must use gender-neutral job advertisements and titles. Further, employers must use objective and gender-neutral criteria when determining pay levels.
Under certain conditions, employees have the right to request information, broken down by gender, on the average pay levels of other categories of workers performing the same work or work of equal value.
- Pay reporting
Employers with at least 100 workers must regularly report on any gender pay gap in the organisation and must make a range of information accessible to their workers.
- Contractual terms
Employers must not use contractual terms which restrict workers’ right to disclose information about their pay.
- Burden of proof
If a worker can establish facts which give reason to believe that there has been direct or indirect pay discrimination on the grounds of gender, it is generally for the employer to prove that no discrimination has taken place.
Member States should provide for effective, proportionate and dissuasive penalties in the event of breach of the rules. Such penalties may include fines for employers or – based on the circumstances – exclusion from public tender procedures.
The next step in the process is the formal adoption of the directive by the Council of the European Union, after which the directive will be finally adopted. The proposal allows for a three-year implementation period after adoption.
Norrbom Vinding will closely follow the further process of the proposed directive in the EU, and we will of course also continuously follow the implementation of the expected final directive in Danish law.
The content of the above is not, and should not be a substitute for legal advice.
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