EU directive on wage transparency.

European Parliament Directive (EU) 2023/970 of May 10, 2023 on strengthening the application of the principle of equal pay for men and women for equal work or work of equal value through pay transparency and enforcement mechanisms entered into force on June 6, 2023. The legislation was introduced to close the gender pay gap. The need for the new directive was dictated by the fact that, until now, the transparency of pay systems was insufficient, which did not allow a clear assessment of equal treatment.

What is openness and transparency of remuneration according to the Equality Directive?

We can find a definition in Article 3(1)(a), which defines “remuneration as the ordinary basic or minimum hourly or monthly wage and any other consideration in cash or in kind received by an employee directly or indirectly (complementary or variable components) from his employer by virtue of his employment.” The openness and transparency of salaries will allow employees to know the average salary of employees in similar positions.

The openness and transparency of salaries will help detect wage discrimination, as well as defend the right to equal pay for men and women. The introduction of a directive that ensures openness and transparency of salaries will further help candidates who apply for a position. The employer will be obliged to state the minimum wage for the position or the salary range in the job advertisement or, at the latest, before the start of the recruitment interview. The EU regulations will help unify the pay system for employees and exclude gender discrimination.

The openness and transparency of salaries obliges the employer to inform the employee of his individual salary level, as well as the average salary level - taking into account the gender breakdown - for employees who perform the same work - as that of the employee requesting the information - or of the same value as his work. The employer should provide this information to the employee in writing.

This directive will not only eliminate wage inequality in a given company, but will also ensure that employed workers know the average salary for a given position. This will eliminate situations in which women and men employed in the same positions receive different salaries.