BRUSSELS – Pressing member states to address gender pay gaps, the European Union unveiled details on Thursday of a proposed law that would require companies to disclose gender pay gaps and provide candidates with access to salary information in Job interviews. It would also give women better tools to fight for equal pay.
The change is because workers around the world have been disproportionately affected by the economic repercussions of the coronavirus crisis, and this could lead to sanctions for companies that do not comply.
The proposed law would also enable women to see if they are being fairly compensated compared to male colleagues. The European Commission, the bloc’s executive arm, wants to provide workers with the ability to seek adequate compensation in the event of discrimination.
According to the proposed law, those who believe they are victims can act through independent monitors to verify compliance with the equal pay requirement. They can also file gender-based wage complaints through workers’ representatives, either as individuals or in groups.
“For equal pay, you need transparency,” said Ursula von der Leyen, the committee chairman, who had pledged to make wage transparency mandatory after she took office in December 2019. “Women should know if their employers treat them fairly. And when not, they must have the power to fight and get what they deserve. “
Although theoretically the principle of equal pay for equal work is one of the fundamental values of the European Union of 27 nations, the difference in wages for men and women who do the same job is 14.1 percent, and the difference in pensions is 30 percent, the commission said. According to the European Institute for Gender Equality, a research group, female managers earn a quarter less than male managers.
Despite several efforts to impose equal pay in practice, for more than 60 years it seemed out of reach for women throughout the bloc, which presents itself as the beacon of human rights and equality. So far, only 10 European countries, including Austria, Germany, Italy and Sweden, have introduced national legislation on wage transparency.
The proposed EU-wide law requires the approval of member countries and the European Parliament. There are concerns that it may be blocked by national governments, as was the case with the European Commission’s proposal to introduce gender quotas on boards of directors. Suspicious of these potential obstacles, Vera Jourova, the bloc’s main authority on values and transparency, called the compensation proposal “pure pragmatism and good economic calculations”, emphasizing that gender equality at work benefits companies.
“We see the very limited appetite of some member states and, surprisingly, of those who have already introduced these measures,” said Ms. Jourova. “What gives me hope is that it is extremely necessary.”
Companies with more than 250 workers would have to publicly disclose their gender pay gap, reflecting concern for smaller organizations, which have suffered a serious economic blow because of the coronavirus.
“I am aware that this proposal in times of economic downturn and uncertainties caused by the pandemic may sound unfortunate for some,” said Helena Dalli, the bloc’s equality commissioner, noting that the law was “duly proportional”.
According to the bill, national governments would be obliged to punish companies that violate equal pay measures. Governments can decide on the penalties imposed, including financial sanctions, which must be effective and proportionate, the commission said.
The proposal comes at a time when researchers warn that the virus can significantly slow the progress of women in the workplace. According to the Women at Work Index 2020, compiled annually in 33 developed countries by PricewaterhouseCoopers, a consultancy, the economic damage of the pandemic, as well as the repercussions of government policies, are disproportionately affecting women. This reversed the steady earnings trend for women in employment and led to what the consultancy calls a “recession”.
Women’s rights groups welcomed the commission’s initiative. “Information is power: wage transparency would allow employees to know the value of their work and negotiate wages accordingly,” said Carlien Scheele, director of the European Institute for Gender Equality. “This would help to combat discrimination in the workplace, which can only be an advantage for gender equality.”
Employers, aware of the possible legal and economic repercussions of the proposal, were cautious in their assessment, blaming what they described as profound underlying reasons for gender inequalities.
“Reasonable wage transparency requirements can be part of the answer,” said Markus J. Beyrer, head of BusinessEurope, a lobby group. “However, the key to improving gender equality is to address the root causes of inequalities, especially gender stereotypes, labor market segregation and insufficient childcare.”
Mr Beyrer said that the commission must respect “the competences of the national social partners” and must not “complicate the management of human resources with excessive administrative burdens and open the way for undue litigation”.
According to Ms. Jourova, “binding rules” are needed, not just the trust in social responsibility assumed by companies. “We see that it doesn’t get anywhere,” she said.