Gender equality is an essential aspect of a fair and progressive society. Despite progress made in recent decades, disparities in wages between men and women remain a major challenge in the European Union.

To address this issue, the European Union has adopted Directive (EU) 2023/970, aimed at ensuring equal pay for men and women for the same work or work of equal value through salary transparency.

Why Did We Reach This Point?

According to Eurostat, in 2021, the gross hourly earnings of women were, on average, 12.7% lower than those of men in the EU.

Difference in earnings between women and men, 2021 (difference between the average gross hourly earnings of male and female employees as a percentage of male gross earnings)

Objectives of This Directive:

  • Pre-Employment Salary Transparency: Transparency in salary before employment is a significant step to eliminate wage discrimination. Therefore, this directive should apply to job applicants as well.
     
  • Equal Pay Structures: Employers will have pay structures that guarantee equal pay for the same work or work of equal value.
     
  • Objective Criteria for Equal Value Work: To facilitate the application of the concept of work of equal value, especially for micro-enterprises and small and medium-sized enterprises, objective criteria should include four factors:
  1. Competence
  2. Effort
  3. Responsibility
  4. Working conditions
  • No Inquiry into Previous Salary: Employers should not inquire or obtain information about the current or previous salary history of a job applicant.
     
  • Accessible Criteria Disclosure: Employers will provide workers, in an easily accessible manner, with the criteria used to determine pay, pay levels, and pay progression. These criteria must be objective and gender-neutral.
     
  • Reporting to Authorities: Employers subject to salary reporting will provide the following information to the authorities responsible for compiling and publishing this data:
  1. The pay gap between women and men.
  2. The pay gap between women and men at the level of complementary or variable components.
  3. The median pay gap between women and men.
  4. The median pay gap between women and men at the level of complementary or variable components.
  5. The proportion of female and male workers benefiting from complementary or variable components.
  6. The proportion of female and male workers in each quartile pay interval.
  7. The pay gap between women and men by categories of workers, broken down by usual basic salary or pay and complementary or variable components.
     
  • Joint Evaluation of Salaries: Employers subject to salary reporting will, in cooperation with their worker representatives, conduct a joint assessment of salaries if the following conditions are met:
  1. The salary reporting demonstrates an average pay gap between female and male workers of at least 5% for any category of workers.
  2. The employer has not justified such a pay gap based on objective, gender-neutral criteria.
  3. The employer has not remedied this unjustified pay gap within six months of submitting the salary reporting.
     
  • Support for Small Employers: Support for employers with fewer than 250 workers in the form of technical assistance and training to facilitate compliance with the above obligations.

It is essential to note that European Union Member States must implement this directive by June 7, 2026.

The following are covered by this directive: all workers (including those with fractional employment), workers with fixed-term employment contracts, individuals with an employment contract or labor relationship with a temporary employment agency, managerial employees, domestic workers, on-call workers, intermittent workers, ticket-based workers, platform workers, workers in protected employment, interns, and apprentices.

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