This is the von der Leyen Commission’s first major initiative on gender equality: a proposal for a directive—finally expected on Wednesday 3 March (see EUROPE 12595/23)—requiring employers in the EU to be more transparent about pay.
A preliminary draft of the directive, a copy of which EUROPE has obtained, indicates this, in order to strengthen “application of the principle of equal pay between men and women for equal work or work of equal value” enshrined in Article 157 of the Treaty on the Functioning of the EU.
According to the document, the forthcoming proposal will apply to both public and private sector employers and will address the transparency of pre- and post-employment pay, as well as the transparency of company policy on pay and career progression.
Right to information
The Commission would like, for example, to see information on the initial level of pay and the pay range for a job provided to job applicants before their job interview, “without the applicant having to ask for it”.
The proposal should also require employers to make available to their workers a description of the criteria used to determine pay levels and career progression within their company.
If this directive were to enter into force as it stands, it would also guarantee workers the right to receive information on their individual pay levels—that is, their gross annual salary and gross hourly wage—but also on the average pay levels, broken down by gender, of workers doing the same work.
Employers would even be required to inform all employees annually of their right to receive such information. They could, however, require that such information not be used “for any other purpose than to defend their right to equal pay”.
Documenting discrepancies in pay
The Commission would also like to see companies with at least 250 employees obliged to “make information available to the public” each year on information relating to the pay gaps, for example by making it available on their websites, the draft states.
This would include making public the pay gap and the median pay gap between all female and male workers, including additional elements such as bonuses.
“In order to reduce any burden”, employers would be expected to be able to include this calculation in their annual report, “provided that this information is publicly available”, the recitals state. Again, to avoid administrative overload, it would appear that small and medium-sized enterprises have been exempted from this measure.
Finally, the Commission would like to require that the information collected—in accordance with the General Data Protection Regulation, it says—be shared with a national supervisory body set up in this framework.
“Joint pay assessment”
What comes next? If the data collected and published reveal an unjustified difference in pay between female and male workers doing equal work, the draft suggests, without much further detail, that the employer should “remedy the situation”.
A slightly more specific measure is detailed, however, for cases where the difference in average pay level is at least 5% or where the employer has not justified the difference observed “by objective and non-sexist factors”.
This would be known as a “joint pay assessment” and would involve bringing together representatives of workers and employers to carry out a detailed analysis of the situation.
Finally, it should be noted that—for data protection reasons—the Directive should give Member States the possibility to limit the accessibility of information to employee representatives only, where such accessibility “would result in the disclosure of the remuneration of an identifiable colleague”.
Sanctions
This is followed by numerous provisions on the legal procedures that can be undertaken to enforce the rights and obligations of this Directive. One provides, for example, that the limitation periods for equal pay actions should be at least 3 years.
Also envisaged are “proportionate and deterrent” sanctions to be applied by Member States in the event of infringement of the Directive.
These include fines, the minimum level of which should be set “[to ensure] sufficient deterrent effect” and to take into account the duration of the offence or any serious negligence or intent on the part of the employer.
The amounts recovered from fines will have to be allocated to equality bodies, the draft still suggests.
An average difference of 16%
The average gender pay gap is 16% in the EU, with a peak estimated at almost 26% in Estonia. It has barely decreased over the last decade, the European Institute for Gender Equality reported in 2019.
Without binding measures on equal pay, women will still have to wait an average of 84 years to obtain equal pay, if current trends continue, the European Trade Union Confederation insisted last October.
“A general lack of transparency about pay levels within organisations maintains a situation where gender-based pay discrimination and bias can go undetected”, the Commission’s draft states.
The institution is reportedly considering allowing 2 years for States to comply with the Directive, starting from its entry into force. However, this still requires the approval of the European Parliament and, above all, of the Council of the EU, some members of which have recently blocked certain texts simply because they refer to the concept of ‘gender equality’ (see EUROPE 12614/26, 12624/33).
See the preliminary project: http://bit.ly/2NW13DC (Original version in French by Agathe Cherki with Pascal Hansens)