What's on My Mind: Closing the Gender Pay Gap
When it comes to the trailblazer countries closing the gender pay gap, based on general perception, Luxembourg will hardly be topping the list. The world’s only remaining Grand Dutchy, with a population of barely 600 thousand people, has officially closed the gender gap, with women earning slightly more than men when average wage hours are considered. According to STATEC, a governmental statistics service of Luxembourg, the gender pay gap in Luxembourg in 2022 stood at -0.7%, an improvement from the previous year of -0.2%. (2023 data is not available yet).
The calculated statistics reflect the gap between the average gross hourly wage of men and women expressed as a percentage of that of men. A negative figure reflects that women's average wage is higher than men's. However, men take home more annually than women, which is primarily driven by women taking on far more part-time roles.
Presently, there is a global trend in countries such as the US, Canada, the EU, and Australia to take further legislative steps to close the gender pay gap. The most recent one is the EU Pay Transparency Directive, which obliges employers to undertake gender pay reporting across the EU.
As of March 2023, the European Parliament introduced new rules on binding pay transparency measures. This directive significantly increases pay transparency, enabling employees to compare salaries and expose potential gender pay gaps. If the gender pay gap is larger than 5%, employers are mandated to conduct an assessment together with the employee. Failing to go through this process translates into governmental fines.?
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While Luxembourg is role-modelling the path towards gender pay gap closure, the country, like the rest of the 26 member states, has to take further steps towards complying with the requirements of the aforementioned EU Directive. This applies to employers in the public and private sectors, covering both employees and applicants. It dictates, amongst other things, that applicants have the right to receive information on the initial remuneration or its range prior to the beginning of employment for the position applied for. Employers will not be entitled to ask applicants about their pay history. Employees will be granted a reinformed right to pay information during employment. Employers will also have to?report information regularly on the Gender Pay Gap (GPG) in their companies, including the median GPG and the proportion of female and male workers in each quartile pay band.
Luxembourg has been spearheading the closure of the gender pay gap since 2016 when it introduced a law that was included in the Labour Code. This law meant the imposition of fines on firms that contribute to gender pay inequality, deliberately or not. There are many societal forms of promoting gender equality, such as tackling stereotypes, generous and flexible paternity plans, work flexibility, empowering girls and women, etc. However, the legislative body exercising its power on pay and transparency is an entirely different force – for good!???