On March 30th, the European Parliament approved a new salary transparency directive aimed at narrowing the gender pay gap across the European Union. With a large majority of MEPs voting in favor of adopting the directive, this new legislation will force companies with more than 100 employees to report and address their wage disparities. This measure is being seen as a major step towards reducing the EU gender pay gap, which currently stands at 12.7%.

The details of the Salary Transparency Directive

The salary transparency directive will require employers to take corrective action if the pay gap between men and women exceeds 5% without justification. Employees will also have the right to access gender-disaggregated salary data, as well as the criteria used to define salary and pay raises, which must be gender-neutral.

The directive will also ensure that job seekers have access to information on the pay ranges of positions they apply for, while employers will no longer be able to ask about previous pay, limiting the possibility of candidates’ salary history influencing the pay offered to them.

This initiative is a significant step forward for gender equality in the EU, as it will make it easier for women to challenge unequal pay practices and demand equal pay as men. It demonstrates that the EU is serious about closing the gender pay gap and ensuring that all employees receive fair and equal pay for their efforts.

How will it work?

Companies with more than 100 employees are required to publish information on the pay gap between male and female employees. As well as the average salary for each gender, under the new pay transparency directive. Employers must take corrective action if the pay gap exceeds 5% without justification. Such as when men and women perform the same work at the same level but are paid differently.

Employers will no longer be permitted to inquire about an applicant’s previous salary, as doing so may perpetuate unequal pay practices and contribute to the gender pay gap. Employers must instead base their offer on the job’s requirements as well as the applicant’s qualifications.

Member states will be required to impose penalties if the principle of equal pay is not followed. And workers will be entitled to compensation if companies fail to follow equal pay obligations. This means that businesses must take equal pay seriously and ensure that they are in compliance with the new directive.

The impact of the Directive

The new pay transparency directive is a significant step towards reducing the gender pay gap in the EU. It will make it easier for women to challenge unequal pay practices. And demand the same salaries as their male counterparts. It will also ensure that employers are held accountable for their pay practices. Plus, encourage them to take steps to address pay disparities.

The directive will benefit more than just women. But also all employees who have been subjected to pay discrimination based on gender, race or other traits. It will ensure that employers are transparent about their pay practices. And that employees have the information they need to negotiate fair salaries.

Now more than ever, it is important to have a great compensation strategy ready. The new pay transparency directive in the EU is a clear indication that employers need to take equal pay seriously. And ensure that they are complying with the new legislation. The TalentUp Salary Platform can help employers follow the new rule. Plus, make sure they pay their employees at a competitive level. Try TalentUp today and take the first step towards pay equality and transparency.

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