Pay Transparency: a Directive is on the way

On 4 March 2021, the European Commission launched its proposal for a Directive on Pay transparency (COM(2021)93) with the aim of ensuring that women and men in the EU get equal pay for equal work.

HOTREC strongly encourages the same level of pay for the same type of work. Nevertheless, we consider that binding legislation will not address the root causes of the gender pay gap. Solutions could pass via combating gender stereotypes, or affordable solutions covering childcare and the elderly.

We welcome the fact that Member States need to create methodologies based on objective criteria to assess work of equal value. Nevertheless, performance and competencies should have been included in the criteria. But, one question remains: how can we evaluate work of equal value based on performance? The challenges of not creating uncertainty are high.

We welcome the fact that micro-enterprises and SME’s are exempted from the need to provide pay gap reports and develop joint pay assessments (and the fact that Member States might compile the data themselves).

But we consider that the negotiation power of employers will be jeopardized, as salaries need to be advertised when a vacancy opens. We also think that the right of employees to ask for information on individual pay level, broken down by sex might bring more administrative burdens to the small companies. It might also be a deterrent for privacy rules, as it will be easy for colleagues in a very small company to know the salary of their colleagues.

HOTREC is looking forward to exchanging ideas with the European Parliament and the Council of the EU on the topics.