Last Updated on May 29, 2023
In the EU, women earn an average 13% less than men for the same work. This is the starting point for Directive (EU) 2023/970, which aims to establish the right to equal pay for men and women performing the same work or work of equal value.
The aim of the European Union is not to affect existing national wage-determination systems—which can, therefore, continue to differ—but to guarantee that companies ensure gender pay equality through transparent criteria for determining pay.
The measure applies to all employers, public and private, and to all employees as well as applicants for employment.
Member States must transpose the new rules by 7 June 2026.
Pay Transparency
The directive sets, first of all, the obligation for companies to make accessible to workers the criteria used to determine pay, pay levels and pay progression, which must in any case be gender neutral.
Moreover, during personnel selection, applicants shall have the right to receive information about initial pay and not to disclose their current pay or prior pay history.
During the course of the employment relationship, employees may instead request (personally, through their representatives or through an equality body) and are entitled to receive within two months of the request, information on their pay level as well as on the average pay received by colleagues performing similar work or work of equal value, broken down by gender. Employers must inform workers annually of this right and how to exercise it.
Moreover, employees may not be prevented from disclosing information on their personal pay treatment for the purpose of implementing the principle of equal pay (so-called prohibition of wage secrecy).
Member States must also ensure that companies make information on the gender pay gap available to the competent authorities. This information, unless otherwise provided by single Member States, must be provided by 7 June 2027, by companies employing at least 150 workers, and by 7 June 2031, by companies employing between 100 and 149 workers. Such data may also be transmitted voluntarily by employers with fewer than 100 workers.
Furthermore, with specific reference only to information regarding the gender pay gap grouped intocategories of workers and broken down into fixed and variable pay components, it is provided that this must be provided by employers to all workers and their representatives and forwarded, on request, to the Labour Inspectorate and equality bodies. The latter may request that companies provide clarificationand/or additional information and take appropriate corrective measures, when necessary, if any pay differences are not justified by objective criteria.
Finally, it is envisaged that, in the presence of an unjustified average gender pay gap of 5% or more, employers shall cooperate actively with trade unions in order to identify the necessary solutions.
Safeguards
The Directive also introduces measures to ensure effective protection against pay discrimination insofar as it:
- broadens the category of persons who can administratively or judicially assert violations of the principle of equal pay to include not only employees who consider themselves wronged but also their union representatives, associations and equality bodies;
- introduces a facilitated evidentiary mechanism according to which it is the employer who has to prove in court the non-existence of the alleged violation, provided that the employee presents factual elements on the basis of which it can be presumed that discriminatory conduct occurred;
- grants workers who have suffered pay discrimination on account of their gender full compensation for damages, including pay differences (also bonuses and fringe benefits), immaterial damages and default interest;
- requires Member States to adopt specific effective, proportionate and truly dissuasive sanctionsin the event of violation of equal pay rules.
It is also stipulated that workers and their representatives exercising their rights under the Directive may not be discriminated against, dismissed or otherwise subjected to retaliatory treatment.
In Italy
Italy already seems to be partially in line with the new EU provisions, considering that Law 162/2021 on equal pay has already provided for:
- the obligation for companies with more than 50 employees to draw up and send to the competent authorities, every two years, a report on the situation of male and female employees that also includes pay data;
- the legitimation to take action not only of employees but also of equality advisors and the application of a facilitated evidentiary regime;
- the establishment of gender equality certification (so-called pink sticker), which certifies the measures taken by employers to reduce the employment and pay gap between men and women.
In any case, the new measure contains innovations that will have to be transposed into the Italian legal system. The importance of the principles of equal pay and pay transparency is also reflected in the acronym ESG (Environmental, Social and Governance), namely the commitment to environmental protection, respect for human and social rights, and transparency in corporate administration and governance, factors that clearly require companies to adopt measures to also ensure transparent pay and equal opportunities for men and women. Our firm is at your disposal to assess the initiatives to be adopted in order to achieve gender balance, also in terms of pay. To this end, we have implemented a specific digital product (the so-called TRS – Total Reward Statement) that provides your HR department with a clear and immediate indication of the real value of the pay package, with a view to fostering internal equality and a transparent pay culture in your company.
Per maggiori informazioni: comunicazione@toffolettodeluca.it
