EU adopts new rules on pay transparency

The European Parliament on Thursday adopted new rules that include banning pay secrecy in a bid to close the gender pay gaps across the region.

A total of 427 plenary members of EU Parliament voted in favour of the new rules, over 79 who were against them and 76 abstentions.

Under the new rules, workers and their representatives will be granted the right to receive information on individual and average pay levels as broken down by gender.

"Pay secrecy will be banned; there should be no contractual terms that restrict workers from disclosing their pay, or from seeking information about the same or other categories of workers' pay," the EU said in a press release.

Addressing gender pay gaps

The new rules also stipulate that pay structures will have to be based on gender-neutral criteria and include gender-neutral job evaluation and classification systems.

Vacancy notices and job titles will also have to be gender neutral, while recruitment processes should be led in a "non-discriminatory manner."

Employers will be asked mandated to send their gender pay gap to the national authority or publish it on their website.

"If pay reporting shows a gender pay gap of at least five per cent, employers will have to conduct a joint pay assessment in cooperation with their workers' representatives," the EU Parliament said.

The rules were touted as an "important step to secure equal pay" across EU, which has a gender pay gap of 13%.

"This legislation makes it crystal clear that we do not accept any kind of gender pay discrimination in the EU," said Danish politician Kira Marie Peter-Hansen, member of the Employment and Social Affairs Committee, in a statement.

Legislation addressing gender pay gaps have been spreading across the world. In Australia, the Parliament recently passed a law mandating employers with over 100 staff to publish their gender pay gaps.

Expanded scope

EU's new rules will also cover the rights on non-binary persons for the first time.

"Non-binary people have the same right to information as men and women. I'm proud that with this Directive, we have defined intersectional discrimination for the first time in European legislation and included it as aggravating circumstances when determining penalties," said Dutch politician Samira Rafaela, member of the Women's Rights and Gender Equality Committee.

Employers get the burden

Workers who suffered harm from the infringement will have the right to claim compensation, according to the new rules. It is also up to employers to provide proof that there were no breaches on pay-related issues.

"In cases where a worker feels that the principle of equal pay has not been applied and takes the case to court, national legislation should oblige the employer to prove that there has been no discrimination," the new rules state.

Member states will need to put "effective, proportionate, and dissuasive penalties" for violating employers, according to the EU.

All that's left now is for EU's member states to formally approve the agreement before the text is signed into law and published in the EU official Journal.