The European Union was at the forefront of human rights protection action since its establishment, particularly in the field of gender equality. It has continued to do so with the adoption of the Pay Transparency Directive, which was adopted on June 6, 2023. The newly adopted directive aims to combat one of the more pressing issues in today’s striving for equality—the gender pay gap within the EU.
With the Directive, key parameters for determining remuneration of employees have been established, with which the enforcement of the rule „Equal pay for equal work or work of equal value“ being easier to enforce than ever before. The Directive also provides employees the right to request the average salary for their position or equivalent positions within the company, with the employer having to cater to the request and, furthermore, divide the remuneration by gender.
Furthermore, cornerstones set by the GDPR are further enforced with the employers now being prohibited from asking potential employees about their previous salaries, with the obligation being imposed on them to inform the applicant of the starting salary or the salary range.
Reporting obligations will be imposed on companies larger than 100, with the frequency of the reporting depending on the number of employees. If the pay gap between genders is higher than 5%, action will have to be undertaken. These thresholds are outlined in their minimal value, with the Member States being free to put higher restrictions into place.
The aforementioned set of rules needs to be implemented into the national law of the Member States until June 7, 2026.