On 4 March, the European Commission unveiled its proposal for ‘Binding rules on pay transparency and equal pay enforcement mechanism’ aimed to address persisting inadequate implementation and enforcement of the fundamental right to equal pay for equal work or for work of equal value. And ultimately, to reduce the remaining gender pay gap in Europe. According to the Commission, this gap remains high at 14.1% with only ten countries* having adopted legal frameworks to address the issue.
The initiative, overseen by European Commission Vice-President Věra Jourová, expands on the European Gender Equality Strategy presented a year ago in March 2020 and includes the following main measures:
Pay transparency measures for workers and employers
The proposal includes an obligation for companies to disclose, on request of the employee, salary related information that would allow salary comparison to the average pay level of workers for the same or comparable job. It also prohibits employers for asking candidates about their current salaries and obliges them to provide information about salary expectations in the job vacancy or during the interview.
Companies with 250 employees or more will be obliged to publish a report on the gender pay gap within their organisations. If there is an unjustified gender pay gap of at least 5 per cent, the employer would have to carry out a joint pay assessment in collaboration with their employee representatives.
Redressive measures and compensation
The proposal also includes a set of tools, mainly related to compensation, including for bonuses or payments in kind, for employees who suffered gender-based discrimination. A reversal of the burden of proof to the employer is also foreseen. Member States should establish specific sanctions, including fines, for companies that repetitively infringe the equal pay rule.
Moreover, the new tools boost equality bodies and workers’ representatives that now may act in legal or administrative proceedings on behalf of the workers as well as add collective claims on equal pay.
The proposal needs to be approved by the European Parliament and the Council of Ministers. Once adopted, Member States will have two years to transpose into national law.
* These countries include Austria, Belgium, Denmark, Germany, Spain, Finland, France, Italy, Portugal and Sweden.
Photo credit: Marc Dossmann, European Parliament 2019.