Pay transparency
On 17 March 2022, the European Parliament’s committees on Women’s Rights and Employment adopted, by a large majority, their position on the proposal for a directive to strengthen pay transparency and combat gender-based pay discrimination (see press release), presented by the European Commission one year ago (see Pay transparency).
MEPs also approved the decision to embark on inter-institutional negotiations (71 votes in favour, 20 against). Parliament has yet to vote at its plenary session, running from 4 to 7 April, to allow negotiations with the Council to proceed. The latter has already adopted its position, in December 2021. In their report, MEPs have extended the scope of the obligation to produce a report on pay gaps to encompass companies with 50 or more employees, instead of the threshold of 250 employees specified in the Commission’s proposal.
In December 2021, when this position was adopted by the Council, some Member States clearly indicated that the threshold of 250 employees was a red line for them, and they would not agree to reduce it. As a result, this point will be hotly debated at the forthcoming negotiation, particularly since several European-level sectoral employers’ organisations immediately responded to denounce this reduction, at a time when the European economy is struggling to recover from the shock of the Covid-19 crisis and also having to cope with the consequences of the war in Ukraine.
Moreover, under the Commission’s proposal, a joint pay assessment will have to be undertaken in conjunction with employee representatives in cases where the report identifies a difference in average pay of at least 5% between female and male workers, unless the employer can justify this difference, based on objective and non-sexist factors. MEPs have also reduced this threshold to 2.5%. Lastly, MEPs want to ban contractual clauses that prevent employees from disclosing information on their pay or requesting information on the same workers’ pay category as their own or on other categories.
(Article published in IR Note 182 – 23 March 2022)
