Pay transparency in the EU. Analysis

A legal analysis of the situation in the EU Member States, Iceland, Liechtenstein and Norway
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Pay transparency is important in order to promote gender-neutral wage-setting structures. Such pay transparency is lacking in a number of European countries. Nonetheless, it is important to realise that the introduction of pay transparency targeted at alerting stakeholders to possible gender pay discrimination is a complex matter due to the fact that gender pay discrimination might flow from subtle and hidden mechanisms. Pay transparency, therefore, places high demands on the information to be provided in order to detect these mechanisms. Pay reporting and pay audits are suitable instruments for doing this. Yet both types of instruments require that a developed pay system is in place, that the necessary knowledge is present and that appropriate human resources administrations have been developed to collect the necessary data. In countries with weak collective bargaining structures and/or where wage setting primarily depends on individual negotiations only, it may sometimes be a more appropriate step to first try to introduce and formalise wage-setting procedures and pay schemes, including job evaluation, in the private sector generally. Even in countries with more developed pay structures in place there are obstacles. Among the different recommended measures, it can be noted that employees’ information rights on gender pay levels for the same work or work of equal value meet with most difficulties due to privacy issues. Moreover, these kinds of information rights are helpful but do not appear to remove all the hurdles so that individual employees can take action. Institutional actors are therefore perhaps best addressed by pay transparency measures, but success will nevertheless also depend on problem awareness and priority being given to securing equal pay. One of the challenges seems to be to break the vicious circle in this respect: a desire for pay transparency is diminished because there is no awareness of gender pay differences at company level, and yet the latter can only be changed by introducing pay transparency. The report shows that introducing pay reports relatively meets the least resistance among the core measures, but they must not become a mere formality between employers and works councils. This could possibly be furthered by also allowing individual employees and/or equality bodies to have access to pay reports and by giving more guidance to employers and employees’ representatives on how to proceed once gender pay differentials are found. First and foremost there is a need to explain how to analyse pay data for signs of possible gender pay discrimination.

Author: Albertine Veldman
Coordinator: Alexandra Timmer
Published in April 2017 (2017-04-27)

Corporate author(s): Directorate-General for Justice and Consumers (European Commission)
Personal author(s): European network of legal experts in gender equality and non-discrimination
Subject: administrative transparency, employer, equal pay, EU law – national law, EU Member State, EU policy – national policy, European Union, gender equality, Iceland, labour law, Liechtenstein, Norway, pay, pay policy, remuneration of work, report, wage earner



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