The EU’s Commissioner for Equality, Helena Dalli, presented on Thursday (4 March) the first EU-wide compulsory rules to force companies to disclose salaries by type of work and employees’ sex. The goal is to tackle the pay gap between men and women in the EU, currently at 14%.
In a video interview with a group of reporters, including from EURACTIV.com, Dalli explained that the directive would ban companies from asking candidates about their previous salaries, as she said this would be a ‘form of discrimination.
What is the goal of the directive?
We want to strengthen the enforcement of the principle of equal pay for work of equal value. It’s part of the Treaty of Rome since 1957, and supplemented in 2014 by a European Commission recommendation on pay transparency. But in spite of these efforts, the principle of equal pay is still not fully implemented and enforced. That is why we felt the need for a directive in this sense.
What are the key elements of the proposal?
It is the right to information on pay prior to employment, which aims at empowering workers in the negotiations on pay at the time when they are hired. It also includes a right to request information on pay, which aims at ensuring that workers can compare themselves at any time during the employment relationship with co-workers of the other sex carrying out equal work, or work of equal value. It contains the pay reporting on the pay gap between female and male workers for companies with 250 employees or more. It also includes the joint pay assessment in case of statistically relevant indications of inequalities. In addition, the directive clarifies what to be understood by the concept of work of equal value, and we’ll improve access to Justice and strengthen the enforcement mechanisms.
Are there any potential sanctions for companies that do not feel bound by the reporting obligations on the pay gap?
Obviously, there will be sanctions, but it will be up to the member states to make them, since it is a directive. But of course, we will be watching and drawing the attention and looking at best practices. Sanctions will have to have a deterrent effect.
When and how would you expect the information to be published?
We are setting the scene and saying this should happen. We have managed to strike a balance with social partners, but we are leaving to businesses how they will implement this. And if there is reason for the employee to say that there is discrimination, the onus is on the employer to prove that it does not discriminate. This will help the employee with court procedures, for example. Of course, this is just one tiny move. This is only addressing a small part of the problem. But when taken together with other Commission initiatives, I hope that in some years, we will see a change. The Work-Life balance directive on its own is not enough. The pay transparency measure on its own is not enough. It’s these directives taken together, and other proposals we may need to do.
According to early drafts, the directive included a ban on employers asking candidates about their previous salaries. Is it still in the final version?
Yes, it is. Previous pay has no bearing on bills and and on the abilities of the applicant for work. And that is why we believe that this not be revealed if the employee does not want to.
How would you enforce this ban, given that is a common practice by companies nowadays? Will companies requesting this information be sanctioned, or the job seeker can simply refuse to provide the information?
If it happens, it will be a form of discrimination, which we are saying it shouldn’t happen. The candidate can report this.
What would change for member states, including Germany, Finland or Spain, with national laws on pay transparency already in place?
If it’s all already done, that’s even better. They can look at the directive and maybe it will enhance their way of applying pay transparency.
[Edited by Zoran Radosavljevic]