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Obligation of transparency against gender pay discrimination in the EU

The European Union (EU) imposes a transparency obligation on businesses in member countries in order to eliminate gender-based wage discrimination between male and female employees.

With the new regulation that facilitates victims' access to justice, companies that violate the equal pay rule will be subject to various sanctions, primarily fines.

The "wage transparency directive", which was brought to the agenda by the European Union Commission, the executive body of the EU, on March 4, 2021, was accepted by the European Parliament (EP).

The new regulation, agreed by the European Commission and the European Parliament on 15 December 2022, envisages greater transparency and effective implementation of the principle of equal pay between women and men, as well as improving access to justice for victims of wage discrimination.

The regulation, adopted by the European Parliament on Thursday, includes:

Employers with at least 100 employees will have to regularly publish information on the pay gap between male and female workers.

In the first phase, employers with at least 250 employees will report on pay equity every year.

This practice will be mandatory every 3 years for employers with between 150 and 249 employees.

5 years after the implementation of my regulation across the EU, employers with 100 to 149 employees will also need to report every 3 years.

If there is a gender-based difference of at least 5 percent in these notifications, which is not valid, the employer will make a re-evaluation of wages with worker representatives.

Employees will have the right to request information from their employers about whether there is a gender-based wage gap between them and the people they do the same job.

This right will be available to all employees, regardless of the size of the company.

Employers will have to provide information about the initial pay level or range prior to a recruitment posting or job interview.

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It will not allow the employer to ask job applicants their past wages.

Employees exposed to gender-based wage discrimination will be able to claim compensation for past wages, bonuses and in-kind payments.

If the workplace does not fulfill its transparency obligations, it will be the employer's responsibility, not the employee's, to prove that there has been no discrimination regarding wages.

Businesses violating these rules will be subject to various sanctions, including fines.

National laws to be updated within 3 years

The regulation adopted by the European Parliament will enter into force 20 days after its publication in the Official Gazette, after the approval of the EU Commission.

EU member states must be regulated and incorporated into their national laws within 3 years.

"Equal work deserves equal pay. You need transparency for equal pay," European Commission president Ursula von der Leyen said before the vote.

According to the data of the European Statistics Office (Eurostat), the wage gap between male and female workers in EU countries is around 13 percent.

Luxembourg ranks first among the countries in the best situation in this regard with 0.7 percent.

The gender pay gap is 15.8 percent in France, 18.3 percent in Germany and 22.3 percent in Latvia.

According to figures published by Eurostat on 1 March, women in business across the EU continue to earn less than male workers.

Although this difference of around 16 between men and women has declined to an average of 12.7 percent this year, inequality is still significant.