The Directive on Pay Transparency (the “Directive”) has been formally adopted and published. The Directive will enter into force on June 6, 2023 and must be implemented in national legislation within three years and in each company within a fourth year.
𝗚𝗲𝗻𝗱𝗲𝗿 𝗣𝗮𝘆 𝗚𝗮𝗽 𝗥𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴
Under the new rules, 𝘨𝘦𝘯𝘥𝘦𝘳 𝘱𝘢𝘺 𝘨𝘢𝘱 𝘳𝘦𝘱𝘰𝘳𝘵𝘪𝘯𝘨 will become mandatory for many private and public employers in the European Union.
The reporting requirement will take effect in two stages:
𝟭. By 2026, employers with 250 or more employees must report their gender pay gap annually; employers with 150 to 249 employees must report every three years; and
𝟮. By 2031, employers with 100 or more employees must report every three years.
In addition, the Directive provides for greater transparency, effective enforcement and access to justice to ensure one of the fundamental principles of the European Union: 𝘦𝘲𝘶𝘢𝘭 𝘱𝘢𝘺 𝘧𝘰𝘳 𝘮𝘢𝘭𝘦 𝘢𝘯𝘥 𝘧𝘦𝘮𝘢𝘭𝘦 𝘦𝘮𝘱𝘭𝘰𝘺𝘦𝘦𝘴, 𝘳𝘦𝘨𝘢𝘳𝘥𝘭𝘦𝘴𝘴 𝘰𝘧 𝘵𝘩𝘦 𝘴𝘪𝘻𝘦 𝘰𝘧 𝘵𝘩𝘦 𝘦𝘮𝘱𝘭𝘰𝘺𝘦𝘳.
The key elements are:
> Wage transparency for job seekers
> Prohibition on requiring job applicants to provide information on past or current salaries
> Right of employees to information on their individual salary and the average salary level of the same category of employees, disaggregated by gender
> Salary transparency in the salary principles
Read the full Directive here.
This article was first published by our Romanian and UAE member firm Suciu – Employment & Data Protection Lawyers. For more information and assistance with employment law matters in their jurisdictions, please contact our representative Andreea Suciu, Managing Partner of the firm.