The EU aims to close the gender pay gap and uphold the principle of equal pay for equal work through new pay transparency rules adopted on 24 April 2023. These rules empower workers to detect and challenge pay discrimination, often rooted in unconscious gender bias within pay systems and job grading. 

By fostering transparency, the EU seeks to raise awareness among employers, helping them identify and address unintentional gender-based pay disparities


How can the EU Pay Directive on pay transparency benefit EU citizens?

New pay transparency rules aim to combat workplace pay discrimination and close the gender pay gap, which averaged 13% in the EU in 2020 (Eurostat, 2021). This gap impacts women’s quality of life increases their risk of poverty and contributes to a 26% pension gap across the EU (Eurostat, 2023).

 

How do these new EU rules intend to increase pay transparency and enforcement?

  1. Access to information
    The new rules require employers to disclose starting salaries or pay ranges in job advertisements and prohibit asking candidates about their pay history. Employees can also request details on average pay levels by gender for similar roles and the objective, gender-neutral criteria used for pay and career progression.
  2. Reporting obligation
    Companies with over 250 employees must report annually on their gender pay gap, while those with 100–250 employees must report every three years. Organisations with fewer than 100 employees are exempt. If a pay gap over 5% is identified without valid justification, companies must conduct a joint pay assessment in cooperation with workers’ representatives.
  3. Access to justice
    Workers facing gender pay discrimination are entitled to compensation, including back pay and related benefits. The burden of proof will shift to employers, who must demonstrate compliance with equal pay rules. Violations will be met with effective, proportionate, and dissuasive penalties, including fines.

  4. Broadening the scope
    The directive also addresses intersectional discrimination—inequalities arising from combined factors like gender, ethnicity, or sexuality—and ensures the needs of workers with disabilities are considered.

     

     


    « Equal work deserves equal pay. And for equal pay, you need transparency. Women must know whether their employers treat them fairly. And when this is not the case, they must have the power to fight back and get what they deserve ».
    President Ursula von der Leyen 
     

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