Just over two years after the European Commission put forward its proposal (see IR Notes 159), the European Parliament has definitively adopted the directive on pay transparency (see press release and Pay transparency). The directive now has to be approved by the Council before it is published in the OJEU. Member States will then have three years to transpose the directive into their domestic law. And the employers will not have very long to prepare for this directive, which introduces many changes. Its flagship measure is the introduction of a new obligation requiring employers to produce a report on their gender pay-gap data, including on its “complementary or variable components” (Article 9). Companies with more than 150 employees will have to prepare the report four years after the directive enters into force. This exercise will then have to be repeated annually by companies with at least 250 employees, and once every three years by those with between 150 and 249 employees. Companies with between 100 and 149 employees, for their part, will have to compile this report within eight years from now, then do so again once every three years. This mechanism is supplemented by a “joint pay assessment” that must be performed in conjunction with workers’ representatives in circumstances where:
1/ the report demonstrates “a difference in the average pay level between female and male workers of at least 5% in any category of workers”.
2/ The employer has failed to justify this difference on the basis of objective, gender-neutral criteria.
3/ The employer has not remedied this unjustified difference (…) within six months of the report’s publication date (Article 10).
One recital of the directive states that “If there are no workers’ representatives, they should be designated by workers for the purpose of the joint pay assessment”.
The directive requires employers to have “pay structures ensuring equal pay” and to use gender-neutral job evaluation and classification systems (Article 4). It also confers a number of direct rights. Applicants for employment shall have the right to receive information about the level of “initial pay or its range” for the position concerned (Article 5). Once they are in post, workers shall have the right “to request and receive in writing” information “on their individual pay level and the average pay levels, broken down by sex, for categories of workers performing the same work as them or work of equal value to theirs” (Article 7). In addition, contractual terms that prevent workers from disclosing information about their pay will be prohibited. The directive introduces a reversal of the burden of proof in cases where the employer has not discharged its pay transparency obligations or the employee establishes “facts from which it may be presumed that there has been direct or indirect discrimination”. The directive introduces stronger penalties, facilitates access to justice and establishes a right to claim compensation or reparation. Lastly, it introduces into EU law the concept of intersectional discrimination, which is “discrimination based on a combination of sex and any other ground or grounds of
