A good day for gender equality in the labour market? The European Parliament and the Council of the EU reached, on Thursday 15 December, a provisional agreement on the Pay Transparency Directive. After a first “agreement on the main political lines” in early December (see EUROPE 13075/22), they have now agreed on a concrete text on the table.
“We are making a big leap forward to close the gender pay gap; with this new pay transparency law we empower workers to enforce their right of equal pay for equal work”, said Marian Jurečka, the Czech Minister for Employment.
Reporting obligations for all
In the last round of negotiations, reporting obligations on pay differentials were still a point of contention.
Finally, all companies, regardless of their size, will have to make available to their employers a description of the gender-neutral criteria used to define their pay as well as disaggregated data on pay in the company. Furthermore, as foreseen in the European Commission’s proposal, the directive will prohibit contractual clauses that prevent workers from disclosing information about their wages. The exemption for micro-enterprises sought by the EU Council will not be included in the final agreement.
However, only companies with more than 100 employees will have to publish the gender pay gap. A compromise between a threshold of 250 employees, supported by the EU Council and the Commission, and 50 employees, wanted by the Parliament. “We would have liked to see even more workplaces publish their pay gap,”, conceded co-rapporteur Kira Marie Peter-Hansen (Greens/EFA, Danish), but she was “still proud that we managed to improve the proposal so much”.
Wage gap tolerated, then sanctioned
If the pay gap data reveals a gender gap of at least 5%, the company will be obliged to work with employee representatives to conduct a joint assessment. This was also a point of contention, with the European Parliament calling for these measures to apply from a 2.5% gap.
Member States will be required to provide for “effective, proportionate and dissuasive sanctions, such as fines” for non-compliance by companies, rather than penalties. “Companies are our allies in achieving gender equality in the labour market. They will therefore have a period of recourse to correct the wage gap”, stressed co-rapporteur Samira Rafaela (Renew Europe, Dutch).
In addition, a worker who feels that he or she has been discriminated against in terms of pay may claim compensation. If the case goes to court, it will be up to the employer to prove that there has been no discrimination. The fact of having faced multiple discriminations (“intersectionality”) may be considered as an aggravating factor.
Scope
It will also be the first time that European legislation includes the notion of “intersectionality”. Similarly, the directive will recognise the rights of non-binary people, but these will only be mentioned and not associated with binding measures.
The provisional agreement was welcomed by both political representatives and the European Trade Union Confederation (ETUC). The employers’ side, on the other hand, is furious. BusinessEurope considers the directive to be a “legal monster” that imposes “incomprehensible requirements for pay reporting and pay assessment on firms with more than 100 employees”.
The European Parliament and the EU Council must now formally adopt the agreement for the text to enter into force. (Original version in French by Hélène Seynaeve)