New EU Rules on Gender Equality on Pay are Coming

Legal - June 6, 2023

The Directive Under Discussion in the European Commission is Based on the Application of the Principle of Equal Remuneration for Men and Women

The European Union is asking for greater safeguards on pay transparency and on the guarantee of absolute equality of compensation between men and women in relation to the type and conditions of work. Among the rules envisaged by Europe, compensation is also provided for all those who report gender discrimination in the workplace and above all in reference to imbalance in remuneration.

The new rules will enter into force twenty days after their publication in the Official Journal of the European Union and are intended for all member countries which will then have to issue the relative legislative, administrative and regulatory provisions to ensure complete compliance with the directive by June 7, 2026.

There will be minimum requirements to be respected in order to make the application of the principle of equal pay more effective for same work or for a job of equal value, between men and women. The necessary information must be guaranteed and fairness between the remunerations must be demonstrated for total pay transparency with the hope that this balance may have legislative implications, following the text of the directive as a guide. All private and public employers will be involved in the application of the new rules and it is aimed at all workers who will have a professional contract or an employment relationship defined by the law in force in the relevant country.

The community rules being approved will impose total transparency, in the candidate selection phase, therefore before the actual recruitment, on the initial salary and classification, on the basis of objective criteria free from gender discrimination. Furthermore, the employer cannot, according to the law, ask the candidate for information relating to previous remuneration to be used as a reference and, in the professional contract, there cannot be clauses that prevent the worker from freely communicating data relating to the agreed remuneration . The new regulation, however, will not prevent the usual and natural negotiations between the parties.

The European Commission also provides that the worker, even before hiring, can have all the clarifications relating to the criteria used by the employer, the definition of the remuneration and any expected economic progression but, in the case of entrepreneurs with less than 50 employees, at least the Italian State, provides for the exemption from this obligation. Each employee may also request documentation relating to their salary level and that of other employees who carry out the same job or work, however, of equal objective value.

In the event that the employer refuses to provide the requested documentation, the employee may request, directly or through his/her legal representative, further details and above all a valid reason for the refusal which must be communicated within two months of the official request. The employer may, however, ask the employee who has requested information not directly related to his person, not to disclose the data and to use it only for the exercise of their right to equal pay, as provided for by the European Community .

According to the new regulations currently under discussion by the European Parliament, the Member States of the Union will have to define national laws that will require companies to produce documents that provide employees or their representatives with certain statistical information. The data that must be provided must include any gender pay gap, including in the variable and average components, the percentages of male and female workers who receive complementary or variable components and the gender pay gap divided by professional category and all relating to the year preceding that of the request.