New pay legislation: we break down what you now can and cannot do in the EU (and what that means for gender equality)

LET'S GET REAL: THE GENDER PAY GAP IN THE EU STANDS AT 13%. THIS MEANS THAT WOMEN EARN AN AVERAGE OF €0.87 FOR EVERY €1 EARNED BY THEIR MALE COUNTERPARTS AND NEED TO WORK ABOUT 1.5 EXTRA MONTHS TO COMPENSATE FOR THE DIFFERENCE.

Our view - not good enough.

Lack of pay transparency has proven to be a major hindrance in tackling discrimination in the workplace and closing the pay gap , which has had a longstanding impact on women's financial independence throughout their whole life, with the pension pay gap currently standing at 30%.?

We were delighted to see the long-lobbied for Directive on pay transparency measures finally pass through parliament a couple of weeks ago, meaning in around seven days' time applicants and employees will have new rights, and employers new obligations, in order to address any unfair pay difference and ensure transparency.

But what does this mean for you if you're in or employ within the EU? We break it down. Here we go!

WHICH EMPLOYERS ARE THESE PROVISIONS MEANT FOR?

All employers, in each Member State, in both the public and private sector, will have to comply with the pay transparency measures.

Employers with more than 100 employees will have to report? (at different intervals based on size) on gender pay gaps within their organisation globally and by category of workers, making the results publicly available.

WHAT TRANSPARENCY MEASURES WILL BE IMPLEMENTED?

The aim of pay transparency is to detect possible discriminations between male and female workers that are not based on any objective and factual criteria but rather stem from (conscious or unconscious) gender bias, while raising awareness on the topic and giving the workers tools to enforce their right to equal pay.

1. Pay transparency for prospective workers: Employers will have to provide information about the initial pay level or its range in the job vacancy notice or at the very least before the job interview. Employers will not be allowed to ask applicants about their pay history.

2. Pay and career progression criteria: Employers will have to make available a description of the criteria used to determine pay and career progression.

3. Right to information for employees: Workers will have the right to request information from their employer on their individual pay level and on the average pay levels, broken down by sex, for categories of workers doing the same work or work of equal value.

4. Reporting on gender pay gap: Employers with at least 100 employees will have to publish information on the pay gap between female and male workers globally and by category of workers.

5. Joint pay assessment: Where pay reporting for a category of workers reveals a gender pay gap of at least 5% not justifiable on objective gender-neutral factors, employers will have to carry out a pay assessment, in cooperation with workers' representatives.

6. Pay gap compensation: The Directive also includes a provision of compensation for workers who have suffered gender pay discrimination and, in the case of lack of transparency, Employers will bear the burden of proof and will be required to demonstrate that no actual discrimination took place. Member States will be responsible for establishing relevant penalties and fines.

As for their daily operations, these measures mean that businesses will need to have in place clear structures to identify tasks, roles and responsibilities allocated with each role, in order to ensure an objective identification of employees contributing with the same work or work of equal value, as well as unbiased policies for hiring and career progression.

WHAT CAN BUSINESSES DO IN THE MEANWHILE?

1. Familiarise: Make sure relevant stakeholders and teams are familiar with the proposal and the new requirements, and keep abreast of any developments at a national level.

2. Understand their current position: Measure, analyse and evaluate functions, duties, and pay structure. Reassess policies and practices to identify possible gaps or misalignments with the proposal.

3. Adjust: Take action and make the necessary adjustments to pay structure and internal practices. Create and implement plans to improve pay and practices information transparency, internally and externally (for workers and prospective workers).

4. Keep the pulse: track, measure and evaluate progress, and identify possible areas for improvement.

The pay transparency Directive aims at guaranteeing the right to equal pay between women and men for equal work or work of equal value. It is an initiative part of the work of the EU to promote equal employment, improve living and working conditions, and eliminate social exclusion.

What does this all mean for you? Some do’s and don’t

AS A BUSINESS AND EMPLOYER, YOU WILL BE REQUIRED TO:

?Stop asking job applicants about their pay history

??Disclose salary (ranges) as part of vacancies or before interviews

??Share ave. salary for an employees role (by sex), upon request

??Report gender pay gaps (only for business >100 employees)

??Reduce unexplainable pay gaps >5% through a pay assessment

AS AN EMPLOYEE OR JOB SEEKER, YOU WILL HAVE THE RIGHT TO:

?Never share your pay history with a potential employer

??Know the jobs salary (range) early in the application process

??Request ave. salary for your current/equivalent job (by sex)

??Retrospective compensation for pay gaps (salary and bonus)

HOW DIVERSELY CONTRIBUTES TO PAY TRANSPARENCY

We've always encouraged our clients (employers) to:

??START sharing salary ranges when advertising their roles

?STOP asking candidates for their pay history

Some common push back we get from employers and hiring managers:

If we share salary ranges, our current employees will ask for higher pay!

Our answer: By sharing your pay range, and letting them tell you!

If we don't ask for current salary, how do we know if they're in our range?

Our answer: By sharing your pay range, and letting them tell you!

WHILE THIS IS A FANTASTIC START TO GET PAY EQUITY TOP OF MIND IN PARLIAMENTS AND BOARD ROOMS ACROSS THE EU, WE HOPE IT IS JUST A MATTER OF TIME BEFORE REGULATIONS ARE EXTENDED BEYOND GENDER, TO ENSURE EQUAL PAY FOR PEOPLE OF ALL BACKGROUNDS AND IDENTITIES.

ANY QUESTIONS? REACH OUT TO US AND OUR TEAM Helen McGuire & Hayley Bakker .