Rules on pay transparency on the way

There still is a pay gap between men and women in the EU and in the Nordic countries. Lack of pay transparency has been pointed out to be one of the biggest reasons for the difference.

The rules contain a number of points that should help to equalize the pay gap between men and women:

Information

Companies must inform the starting salary or the salary range of a position before a job interview, for instance, in the job posting. Companies will not be able to ask about the applicants’ salary in their current or previous jobs.

Employees are given the right to ask about the average salary levels in the company. The salary levels must be categorised by gender and show employees doing the same work or work of equal value.

The company must make sure that employees easily can see the objective and gender-neutral criteria the salary is determined by. Companies with fewer than 50 employees can be exempted.

Sanctions

Employees can receive reimbursement or compensation if they are paid a lower salary for the same work or work of equal value. There is no maximum amount, and employees must be compensated as if they had not been treated differently. Companies will potentially be sanctioned if they do not fulfil the requirements.

Annual report

Companies must regularly report their employees’ salaries with objective and gender-neutral criteria. It is the size of the company that decides when the company must report for the first time after the rules have entered into force. Companies with fewer than 100 employees can be exempted.

Salary assessment

If there is a difference of more than 5% that is not justified by objective and gender-neutral criteria, and the difference has not been corrected after six months, the company must review the salary with the employee representatives.  

IUNO’s opinion

The new rules from the EU have been a long time coming, and the countries still have until 2026 to implement the rules. We are keeping an eye on the development of the rules.

IUNO recommends that you, as a company familiarize yourself with the new rules already now. Although it is not yet clear how the Nordic countries will implement all the rules, there are some requirements that are fixed.

[The European Parliament and the Councils Directive on pay transparency of 24 April 2023]