Gender pay gap: Parliament backs binding pay-transparency measures

EU companies with at least 50 employees should be fully transparent regarding pay, and MEPs want them to tackle any potential gender pay gap.

On Tuesday, 5 April 2022, Parliament decided by 403 votes in favour, 166 against and 58 abstentions to enter into negotiations with EU governments on a Commission proposal for a Pay Transparency Directive.

MEPs demand EU companies with at least 50 employees (instead of 250 as originally proposed) be required to disclose information that makes it easier for those working for the same employer to compare salaries and expose any existing gender pay gap in their organisation. Tools to assess and compare pay levels should be based on gender-neutral criteria and include gender-neutral job evaluation and classification systems.

If pay reporting shows a gender pay gap of at least 2.5% (versus the 5%proposed by the Commission), member states would need to ensure employers, in cooperation with their workers’ representatives, conduct a joint pay assessment and develop a gender action plan.

MEPs want the Commission to create a dedicated official label to award to employers whose organisations do not have a gender pay gap.

Prohibit pay secrecy

The text stipulates that workers and workers’ representatives should have the right to receive clear and complete information on individual and average pay levels, broken down by gender. MEPs also propose the prohibition of pay secrecy, via measures forbidding contractual terms that restrict workers from disclosing information about their pay, or from seeking information about the same or other categories of workers’ pay.

Shift of burden of proof

MEPs re-affirm the Commission’s proposal to shift the burden of proof on pay-related issues. In cases where a worker feels that the principle of equal pay has not been applied and takes the case to court, national legislation should oblige the employer to prove that there has been no discrimination.

Next steps

Parliament is now ready to enter negotiations on this law as the Council already adopted its position last December.