Parliament's plenary approved, with 427 votes to 79 against and 76 abstentions, new rules on pay structures, setting out the need to compare pay levels on gender-neutral criteria and to include gender-neutral job evaluation and classification systems.

The Pay Transparency Directive implies important obligations for employers to establish pay transparency within organisations and strengthen enforcement mechanisms for workers.

The main provisions can be summarised as follows:

• workers will have the right to information on pay in their category of work before the hiring and during the employment relationship. Employers cannot ask prospective workers about the pay history of their former and current employment relationship;
• All employees, irrespective of company size, have the right to request information about their salary level and the average salary level, broken down by gender, for categories of employees doing the same work or work of equal value. The information can also be requested through representatives.
• The Directive sets out the obligation to report annually on the gender pay gap for companies with more than 250 employees, while companies with more than 100 should report every three years. If the gender pay gap exceeds 5%, a joint pay gap assessment must be conducted with employee representatives.
• New rules provide a reversal of the burden of proof: where the employer has failed to meet its transparency obligations, it will be up to the employer, not the employee, to prove that there was no wage discrimination.
• Finally, the Directive includes dissuasive penalties, including fines, for employers not complying with the rules.

Member states must implement the Pay Transparency Directive into their national laws within three years after it enters into force. Employers must comply with the new requirements once implemented at the national level. 

Employers with over 150 workers must report the pay gap information within one year after implementation. Employers with 100 to 149 workers need to report the pay gap information within five years after the date of enactment.

Here you can find our previous news on the progress of the proposal of the Directive. 

The Directive confirms the growing importance of the issue. 

We previously reported that, according to the paper by the International Labour Organization (ILO), Pay transparency legislation: Implications for Employers and workers' organizations, published on September 2022, pay transparency measures can help to address the gender pay gap and reduce broader gender inequalities in the labour market.

A new ILO brief, published on March 2023, confirms that women's access to employment, working conditions, and labour income gap has barely improved in the past two decades and the importance of addressing the situation.