The European Parliament has moved to prohibit pay secrecy in work contracts, aiming to promote transparency and tackle gender pay discrepancies across the European Union. MEPs have proposed that companies develop a gender action plan if the pay reporting shows a gender pay gap of at least 2.5%, lower than the 5% threshold initially proposed by the European Commission.
Despite existing regulations, working women in the EU still earn on average 13% less than men for doing the same job. This persistent pay gap highlights the need for more stringent measures and enforcement.
The EU will require companies with at least 50 employees to report transparently on the gender pay gap within their organizations. This measure aims to make it easier for employees to compare salaries and identify potential pay disparities based on gender.
On April 5, 2022, the European Parliament voted in favor of entering negotiations with EU governments on a Pay Transparency Directive. The vote saw 403 in favor, 166 against, and 58 abstentions.
MEPs advocate for the use of gender-neutral criteria and tools for assessing and comparing pay levels, including gender-neutral job evaluation and classification systems.
The European Parliament has called for the creation of an official label to recognize employers that have successfully eliminated the gender pay gap in their organizations.
The proposal also includes a shift in the burden of proof in pay discrimination cases. Under the proposed measures, if a worker believes their employer violated the equal pay principle and takes the case to court, the employer must prove that no discrimination occurred.
With the Council having adopted its position last December, the European Parliament is now prepared to enter negotiations to finalize the law.
The principle of equal pay is established under Article 157 of the Treaty on the Functioning of the European Union (TFEU). However, despite this principle, the gender pay gap persists across the EU, averaging around 13%, with significant variations among member states. The gap has only marginally decreased over the past decade.
