EU approves legislation against gender pay inequality – 03/30/2023 – Market

After two years in the pipeline, the European Parliament approved, this Thursday (30), new legislation to combat wage inequality between women, men and non-binary people in all 27 members of the European Union. Considered a historic step, the package imposes transparency measures on companies in the private and public sectors, with the imposition of fines. Countries have up to three years to adopt the rules.

Called the Wage Transparency Directive, the law, initiated by the European Commission, the bloc’s executive arm, requires companies with more than 100 employees to publish periodic reports on the pay gap detailed by gender. Countries may, through national laws, extend the rule to smaller companies.

If wage differences of at least 5% are detected between genders within the same categories, without objective justification, employers will need to carry out a review together with employee representatives. The text was approved in Brussels by 427 votes in favour, 79 against and 76 abstentions.

“With this directive, we guarantee citizens the right to information and, finally, we will have the legislation we need to combat wage discrimination”, said Dutch MEP Samira Rafaela, one of the rapporteurs of the project. “With this vote, we abolish secrecy on pay. We strengthen workers’ rights and ask employers to report and correct their wage differences”, said the Danish Kira Peter-Hansen, also rapporteur.

According to 2021 data, men earn on average 12.7% more than women in the EU. The biggest disparity is found in Estonia, at 20.5%, and the smallest in Luxembourg, where women earn slightly more than men (0.2%). Several countries, such as France, Portugal and Spain, already have actions in place to combat gender disparity, but, from now on, the 27 of the bloc must apply and comply with the same rules.

It will be up to each national government, in the implementation phase of the European directive, to define the sanctions for companies that do not respect the legislation. The EU text does not indicate values, but provides for fines among “effective, proportionate and dissuasive” measures. If an employee feels aggrieved by pay discrimination, he or she can claim compensation. Each country must establish which national body will exercise oversight of law enforcement.

Another topic makes reference to salary disputes fought in court. If the employee alleges that the principle of equality was not respected, the burden of proof rests with the company. In addition to periodic company reports, employees have the right to request and receive information on wages paid within their own category, according to gender. Reports must also indicate the proportion of female and male workers in each salary range.

In the debate that preceded the vote in Brussels this morning, the celebratory tone was broken by MEPs who opposed the legislation, such as the Spanish Margarita de la Pisa Carrión, from the ultra-right party Vox, who classified the directive as a “left-wing demagoguery”. which will result in a negative work environment. “It is a directive-slogan that is not intended to help women, but to introduce gender ideology into our laws.”

The European Commission intensified the fight against wage inequality from 2014 onwards, recommending transparency within companies, which was later considered insufficient. Upon taking office in December 2019, Ursula von der Leyen included the issue among her priorities and, two years later, presented the bill now approved.

In Brazil, President Luiz Inácio Lula da Silva (PT) announced, at the celebration of Women’s Day, bill 1.085/2023, which determines the publication of salary transparency reports by companies with 20 or more employees, with a forecast of inspection and a fine of ten times the highest salary of the company. The text is pending in Congress.

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Measures require transparency from companies and control from countries

Transparency

Companies will be required to provide, at the employee’s request, information on salary levels within their category, with details by gender. Firms with more than 100 employees must submit periodic reports on wage inequality.

Correction

If the report shows a gender pay gap of 5%, employers must conduct a review together with employee representatives.

Oversight

Each country must define which body will support the implementation and act in controlling compliance with the rules.

Punishment

It will be up to the countries to define how the sanctions will be for those who do not comply with the new legislation, with “effective, proportionate and dissuasive” penalties, such as fines. The EU does not indicate values, but provides for this type of sanction.

Repair

If an employee considers himself a victim of gender pay discrimination, he has the right to seek compensation.

in the courts

If wage discrimination based on gender is contested by the employee in court, it will be up to the company to prove the contrary.

Implementation

The approved text will be ratified by the European Council and will enter into force 20 days after publication in the official EU journal. Countries will have up to three years to apply the rules.