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Opening remarks by Commissioner Dalli on the proposal for a directive to strengthen the application of the principle of equal pay for equal work through pay transparency and enforcement mechanisms

Met dank overgenomen van Europese Commissie (EC), gepubliceerd op donderdag 4 maart 2021.
  • EU law prohibits pay discrimination between women and men, and the Commission has also issued recommendations on pay transparency to help Member States implement this principle of equal pay.
  • However, despite the existing legal framework, women and men are still not paid equally in the EU.
  • As the Vice-President just said, this depends on many factors: one of the causes leading to this gap is the issue of gender-based pay discrimination - and that is the difference in pay for equal work or work of equal value.
  • Many women work their whole life being paid less than male colleagues but they cannot prove it.
  • The lack of transparency in pay setting makes it difficult to detect, acknowledge and address pay differences.
  • It feeds the persisting gender bias in pay structures and the undervaluation of women's work.
  • 13 Member States already have some form of binding pay transparency measures in place in national law and policy.

The Vice-President mentioned a few examples.

  • This has indeed shown positive results but we definitively must do more.
  • The pay transparency directive will apply in all Member States and strengthen the application and enforcement of the principle of equal pay.

It will:

  • Introduce pay transparency measures to allow workers to get the necessary information about possible pay differentials; and
  • Strengthen the rules on remedies and enforcement to ensure workers' access to justice in case of suspected pay discrimination.
  • The proposal also clarifies key concepts at the core of the principle of equal pay.

[What will this Directive mean for workers?]

  • Introducing pay transparency gives workers the tools to get the necessary information about possible pay differentials.
  • The Directive sets out the right to receive information about pay both prior to employment and during
  • Job applicants will receive information about the initial pay level for a job before they go to an interview.
  • And a prospective employer will not be allowed to ask applicants for their pay history.
    • This is to avoid that existing gender-based pay discrimination and bias is perpetuated over time and ensure that women and men enjoy a balanced and fair salary negotiation for a job.
  • Workers will also have the right to receive pay information from their employers about how their pay compares with the average pay level of colleagues doing the same work or work of equal value broken down by sex.
    • This will help them compare and assess whether or not they may be discriminated against.
  • We further empower workers to make claims for equal pay if they suspect there is discrimination.
  • These measures include rules on legal representation, shifting the burden of proof to the employer, not risking heavy legal costs, the right to compensation and protection from retaliation.
  • Equality bodies and workers' representatives will be able to act on workers behalf, including by bringing a collective claim of several workers.

[What will this directive mean for employers?]

  • The directive will apply to employers in both the private and public sectors.
  • All employers, regardless of their size, will have to provide the pay information to individual workers.
  • Employers with 250 employees or more will be required to report annually on any average pay gaps between women and men in their organisation.
    • This information will be made public and thus help raise awareness about equal pay issues and encourage employers to evaluate and monitor pay structures to ensure pay equality.
  • Employers will also need to report on any gender pay gap in each category of workers doing the same or equal work.
    • This information will not be made public.
    • But if the report shows a pay difference of 5% or more in any category of workers that cannot be justified by objective gender-neutral criteria, the employer will be required to carry out a joint pay assessment together with the workers' representatives.
  • This joint pay assessment will help identify reasons for such pay differences and remedy the problem.
  • If such actions are not enough, and a discrimination case ends up in court, the directive sets out a range of remedies and penalties, such as:
    • Paying compensation to the worker, including the full recovery of pay, compensation for lost opportunities and moral prejudice.
    • Injunction orders to take structural or organisational measures;
    • Fines
    • or exclusion from participation in public procurement

[What will this directive mean for Member States?]

  • As for any EU directive, Member States will have to ensure that the results intended with the provisions are achieved.
  • This includes, for example, to ensure that tools and methodologies are established to assess and compare the value of work based on a set of objective criteria.
  • The objective criteria to assess the value of jobs or positions (based on ECJ case-law) includes a non-exhaustive list such as education, professional and training requirements, skills and responsibilities.
  • The tools or methodologies may include gender-neutral job evaluation and classification systems.
  • Member States have the flexibility deciding how to organise this and thus respecting practices where social partners and collective bargaining play an important role.
  • Member States will also appoint a monitoring body which will help ensuring implementation, data collection, and raising awareness about equal pay.

[Conclusion]

  • I am aware that tabling this proposal in times of an economic downturn and uncertainty caused by the pandemic may come across as ill-timed for some.
  • But we have carefully analysed the possible impact of this proposal and ensured that it is duly proportional.
  • Therefore, the reporting requirements are requested for bigger companies limiting excessive costs and burden in this particular time.
  • However, it is also clear that this initiative is important in the pursuit of equality and fairness in building a society where everybody is equally valued, included, and respected.
  • Our proposal on pay transparency is balanced and will benefit businesses, beyond equality and regulatory compliance.
  • It will help change business culture where workers feel they are allowed to ask for equal treatment, and where employers pro-actively report on these issues.
  • Because more transparency allows for more diversity and inclusion.
  • And this gives a company the edge to attract talents because they tell us that they recognise and value employees fairly.

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