Key facts
- The EU's Pay Transparency Directive becomes effective on June 7.
- Companies must disclose salary ranges in job postings.
- Companies must report internal gender pay gaps.
- The directive aims to close the 12.7% gender pay gap in the EU.
- Employers with at least 100 employees must report gender pay differences annually.
- Employers with 150 or more employees must report gender pay differences every three years.
- Job applicants must be informed of starting salary ranges.
- Employees can request information on pay levels.
The European Union has enacted a new Pay Transparency Directive, set to take effect on June 7. This directive mandates that companies operating within EU member states must disclose salary ranges in their job postings. Additionally, employers will be required to report on internal gender pay gaps. The primary objective of this legislation is to address and ultimately close the persistent gender pay gap, which currently stands at 12.7% across the EU.
The directive imposes specific reporting obligations based on company size. Employers with 100 or more employees will need to report on gender pay differences on an annual basis. For companies employing 150 or more individuals, the reporting requirement will be every three years. Beyond external job postings, the directive also stipulates that employers must inform job applicants about the starting salary range for a position. Furthermore, employees will have the right to request information regarding pay levels within the organization.
This legislative push by the EU aims to bring greater equity to the labor market by making salary information more accessible and transparent. By shedding light on pay disparities, the directive seeks to empower employees and encourage companies to take corrective actions to ensure equal pay for equal work or work of equal value. The directive is expected to foster a more equitable compensation environment across all member states.