Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

Pay transparency yes, but we need more for equal pay

Kalina Arabadjieva 3rd January 2023

The gender pay gap is stubborn because several factors underpin it. Action is needed on all of them.

gender pay gap,equal pay,transparency,directive
A woman worker will often be unaware of what a male comparator earns (goodluz / shutterstock.com)

After a series of trilogues, shortly before the holiday the European Commission, European Parliament and Council of the EU reached provisional agreement on a directive to strengthen implementation of the principle of equal pay between men and women, through pay-transparency and enforcement mechanisms.

The new legislation was tabled by the commission in March 2021. It addresses longstanding barriers to effective realisation of the right to equal pay—a foundational principle of the European Union since the 1957 Treaty of Rome. The agreement on the new rules has already been approved by member states’ deputy permanent representatives and the consent of the parliament will now be sought.

Persistent gap

The compromise text leaves room for improvement. But if adopted the legislation would without doubt be a win for women workers and for the trade unions and women’s organisations which have been pressing for pay transparency for many years. Still, further measures are needed to close the persistent gender pay gap, which stood at 13 per cent across the EU in 2020.

One of the main barriers to proper application of the principle of equal pay—prohibiting pay discrimination on the basis of sex for equal work or work of equal value, which almost exclusively affects women—is the fact that workers are often not aware of what their colleagues earn. Some may be contractually obliged, via a pay-secrecy clause, not to disclose their pay to others.


Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content. We will never send you spam and you can unsubscribe anytime.

Sign up here

The new measures would prohibit such clauses and oblige employers to disclose to job applicants the initial pay or pay range for a position. Employers would have to report on gender pay gaps within the enterprise and across categories of workers doing work of equal value and conduct a joint pay assessment with workers’ representatives where the report reveals a gender pay gap of more than 5 per cent—and remedy the situation.

In the commission proposal, reporting and pay-assessment obligations were limited to employers with more than 250 workers. This would have left out around two-thirds of the workforce and 99 per cent of all employers in the EU. The compromise reached would oblige employers with more than 250 to report on pay gaps annually, and employers with 150 to 249 workers only every three years, starting a year after transposition of the directive into national law; the latter would also apply to employers with 100 to 149 workers, but with a five-year stay.

The period for transposition by member states will be three years, so some medium-sized enterprises would not need to issue their first reports for eight years. Enterprises with under 100 employees will still not be required to report on and address pay gaps. So a large part of the workforce will still not benefit—at least not for a long time—from one of the most important pay-transparency measures.

Encourage bargaining

The directive addresses further difficulties faced by victims in bringing equal-pay claims, such as expensive and lengthy proceedings, short limitation periods or limited access to evidence—all of which can be burdensome for an individual worker. Some of the more ambitious commission proposals have however not been included in the agreement—for example, to ensure that equality bodies and workers’ representatives can represent several workers at once.

Further provisions should contribute to addressing pay discrimination and pay gaps, without the need for workers to bring individual claims. These concern penalties for non-compliant employers, as well as requirements to provide adequate resources to equality bodies and to designate a monitoring body to support the implementation of equal-pay legislation.

The commission’s proposal lacked substantive measures to promote social dialogue and collective bargaining as key tools to address pay discrimination—which, again, do not leave the onus on individual workers to uncover discrimination and take action against their employer. While the compromise text does not depart radically from the original in this respect, there is one positive addition: under article 11, member states will have to take steps to promote the role of social partners and encourage exercise of the right to collective bargaining on measures to tackle pay discrimination.

The language is cautious: ‘encourage’ is not ‘guarantee’. But, together with the requirement on states to promote collective bargaining and produce action plans to increase bargaining coverage where it is under 80 per cent under the minimum-wages directive, this signals growing recognition in EU social legislation of the need to protect and promote the right to collective bargaining. While a moderate step at this stage, it is a precedent which future legislation can build upon.

Long and complex

These are only some features of a quite long and complex piece of legislation. Another positive addition is allowing comparison with how a worker ‘would’ be treated in a comparable situation where no real comparator can be established. This will help workers in underpaid, female-dominated jobs to bring equal-pay claims.


We need your support


Social Europe is an independent publisher and we believe in freely available content. For this model to be sustainable, however, we depend on the solidarity of our readers. Become a Social Europe member for less than 5 Euro per month and help us produce more articles, podcasts and videos. Thank you very much for your support!

Become a Social Europe Member

On the other hand, important measures proposed by the parliament to strengthen the directive—such as gender action plans and further obligations to consult or co-operate with social partners—were not included in the agreement struck with the council. It will also be at least three years before workers benefit from the new rules and there is an urgent need to promote equal pay in the wake of the pandemic, with its setbacks for gender equality.

The directive on pay transparency covers only a fraction of the measures essential to tackle the gender pay gap. These include well-paid parental leave and paternity leave of sufficient duration, and addressing gender stereotypes at work and occupational segregation. Adequate and affordable care services and decent pay for care workers are crucial too.

Kalina Arabadjieva
Kalina Arabadjieva

Kalina Arabadjieva is a researcher at the European Trade Union Institute, with a PhD in labour law. She is working on gender equality and the just transition.

You are here: Home / Economy / Pay transparency yes, but we need more for equal pay

Most Popular Posts

Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse
income inequality,inequality,Gini,1 per cent,elephant chart,elephant Global income inequality: time to revise the elephantBranko Milanovic
Orbán,Hungary,Russia,Putin,sanctions,European Union,EU,European Parliament,commission,funds,funding Time to confront Europe’s rogue state—HungaryStephen Pogány

Most Recent Posts

reality check,EU foreign policy,Russia Russia’s invasion of Ukraine—a reality check for the EUHeidi Mauer, Richard Whitman and Nicholas Wright
permanent EU investment fund,Recovery and Resilience Facility,public investment,RRF Towards a permanent EU investment fundPhilipp Heimberger and Andreas Lichtenberger
sustainability,SDGs,Finland Embedding sustainability in a government programmeJohanna Juselius
social dialogue,social partners Social dialogue must be at the heart of Europe’s futureClaes-Mikael Ståhl
Jacinda Ardern,women,leadership,New Zealand What it means when Jacinda Ardern calls timePeter Davis

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

ETUI advertisement

The EU recovery strategy: a blueprint for a more Social Europe or a house of cards?

This new ETUI paper explores the European Union recovery strategy, with a focus on its potentially transformative aspects vis-à-vis European integration and its implications for the social dimension of the EU’s socio-economic governance. In particular, it reflects on whether the agreed measures provide sufficient safeguards against the spectre of austerity and whether these constitute steps away from treating social and labour policies as mere ‘variables’ of economic growth.


DOWNLOAD HERE

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

Foundation for European Progressive Studies Advertisement

The winter issue of the Progressive Post magazine from FEPS is out!

The sequence of recent catastrophes has thrust new words into our vocabulary—'polycrisis', for example, even 'permacrisis'. These challenges have multiple origins, reinforce each other and cannot be tackled individually. But could they also be opportunities for the EU?

This issue offers compelling analyses on the European health union, multilateralism and international co-operation, the state of the union, political alternatives to the narrative imposed by the right and much more!


DOWNLOAD HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube