Susan Doris-Obando discusses the upcoming deadline and explores the potential challenges and opportunities for professionals during the policy transition.
The EU Pay Transparency Directive, which EU member states are required to implement by 7 June 2026, is a policy that will “significantly reshape employment law around the world. pay transparency within the EU“explains Susan Doris-Obando, employee at Dentons Ireland.
“The aim is to bring down the EU the gender pay gapwhich is currently around 12pc, by being transparent about salary and making it easier for workers to submit requests for equal salaries,” he said.
It came into effect in June 2023, and EU member states were told they would have a deadline of 2026 to implement the directive. This means that employers will have to accept many changes in recruitment and the distribution of employment-related information.
“At the time of recruitment, employers will be required to provide candidates with information on starting salaries or wages and ensure that job vacancy notices and qualifications are gender-neutral and recruitment processes are conducted in a non-discriminatory manner,” explained Doris-Obando.
“They will be prohibited from asking candidates about their current or past salary and using conditions of salary concealment. During the employment relationship, employees will have the right to request and receive, within a reasonable time and in any event within two months, written information about their individual salary level and the average salary levels, separated by sex for employees performing the same work or work of equal value.”
It will also be the duty of the employer to ensure that the methods by which the employee’s salary is determined, the salary level and the salary increase, are made easily accessible. Additionally, employers with more than 250 employees will be required to report annually on the gender pay gap in their organization.
Reporting is mandated every three years for employers with more than 150 but fewer than 250 employees, starting with the first report in June 2027. Organizations with 100 or more employees and fewer than 150 employees will be required to start reporting in June 2031.
Doris-Obando noted the main difference between the directive and the current policies of reporting on the gender gap that already exists in many EU member states that the new rules require reporting by categories of workers – that is, those who do the same work or work of equal value.
He said: “If the report reveals a wage gap of more than 5pc in the same job category or work of equal value that cannot be justified by the established, gender-neutral criteria and cannot be corrected within six months, employers will have to take action to conduct a joint wage review conducted in collaboration with the workers’ representatives.”
It is also important to note that this directive does not prevent employers from paying workers who perform the same job or work of equal value differently, as long as it is based on objective, gender-neutral and unbiased criteria, such as performance and skill.
In addition, as Doris-Obando said, many member states – including Ireland – will miss the implementation date and will have to take a phased approach to implementation. Ireland so far, only has draft legislation in place regarding tenancy obligations.
Results of instructions
In the possible consequences, he explained that organizations that fail to implement these new laws will definitely face an increase in requests for equal pay, and this order will remove the burden of proof in requests from the employer where the employee establishes equal pay. prima facie the case.
“If an employer does not comply with its gender pay reporting obligations or requests for pay rate information, then the onus may shift to the employer, unless the violation was clearly unintentional and minor in conduct. A significant gender pay gap may also attract the wrong people, impacting hiring and retention.”
He also anticipates problems in building a robust gender-neutral job evaluation system and a classification system that can properly differentiate those doing the same job or work of equal value. This is not an easy task, you realize, but now is the time to start preparing.
“Work of equal value is often not immediately apparent,” he said. “For example, in some cases, shop workers have been found to be doing work of equal value to shop workers. The next step will be to understand the gender pay gap between each job category and consider any reasons for gender bias. Any corrective measures should be addressed.
“Policies should be put in place that explain the methods used to determine salary, pay levels and salary progression and how to deal with salary when hiring and respond to requests for information on employee pay levels. International employers will need to consider whether they will adopt global policies and consider their approach to integrating member countries into this directive.”
On the long-term effects of this order, Doris-Obando said that the workers’ representatives will have a much bigger role to play, especially, in the discussions about collective wage reviews, where their role is usually temporary in relation to the collective termination of the work or negotiations for the transfer of jobs (Employment Protection).
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