I Come From a Pay-Transparent Country

I Come From a Pay-Transparent Country – EU Legislation to Eliminate the Gender Pay Gap!

Transparent pay policy

Like many others, Réka arrives at her new workplace with high expectations. On her first day she signs her employment contract, and while reading through it she is surprised to see that it contains no prohibition on discussing her pay with colleagues. After completing the usual administrative steps, Réka encounters another surprise: alongside her job description and the standard information materials, she receives a rather intriguing document. Its title: Pay Determination and Pay Progression Policy.

Réka expects to find the usual corporate empty phrases, but to her astonishment the document sets out in detail the criteria influencing employees’ remuneration, pay levels and pay increases. Among these criteria are the employee’s relevant qualifications and experience, as well as the level of responsibility associated with the position.

Although Réka appreciates the effort, she remains somewhat sceptical as to whether these seemingly objective and gender-neutral criteria will genuinely play a role in determining pay. She also suspects that many employees will simply misplace this small piece of paper they were handed, making it difficult to rely on it later.

Lost in thought, Réka walks down the corridor when she suddenly passes a bulletin board and notices that the same criteria have been posted there as well, making them easily accessible to everyone.

The right to information

Réka is gradually introduced to the workings of her new workplace, receiving all kinds of useful knowledge along the way. Just as she thinks she has learned everything, something unexpected comes to light: she has the right to access information about her own pay level, as well as the average pay of colleagues performing the same work, broken down by gender. She may even access this information via the employees’ representative. Réka’s eyes light up: these rights, previously only words on paper, now take on tangible meaning, and she realises that pay transparency can be a truly powerful tool in asserting her interests.

Disclosing pay

In the months that follow, Réka feels increasingly comfortable at her workplace. She often goes for lunch with colleagues, and what else would colleagues discuss but workplace matters? One day, the topic of pay comes up, and an old reflex kicks in for Réka: she instinctively feels she must not talk about her own salary. One of her colleagues quickly reassures her: there is no reason for concern, employees cannot be prevented from disclosing their pay for the purpose of enforcing the principle of equal pay. Réka is surprised to see her colleagues speak openly about their salaries, and even more surprised when she realises that her male colleagues do not earn more than she does, and that any real differences stem from objective factors such as work experience or the level of responsibility associated with the role.

What obligations do employers have to ensure pay transparency during employment?

Under the EU Pay Transparency Directive, employers have several important obligations during employment to promote equal pay and pay transparency.

Employers must ensure that employees have easy access to information on the criteria applied in determining remuneration, pay levels, and pay progression. These criteria must be objective and gender-neutral. Smaller employers with fewer than 50 employees may be exempt from certain obligations regarding pay progression.

Employees have the right to request and receive in writing information on their own pay level, as well as the average pay level of other workers performing the same work or work of equal value, broken down by gender. They may obtain this information directly from the employer, through their employee representative, or through an equality body. If the data provided is incomplete or inaccurate, employees may request further clarification and must receive a reasoned response.

Employers must inform employees annually of their right to request this information and the steps required to exercise that right. Requests must be fulfilled within a reasonable time, but no later than two months after submission. Importantly, employees cannot be prevented from disclosing their pay for the purpose of enforcing the right to equal pay. At the same time, employers may stipulate that such information not be used for purposes unrelated to equal pay.

Overall, the aim of the Pay Transparency Directive is to ensure that employers provide clear, transparent, and objective frameworks for determining pay, helping reduce gender pay disparities and strengthening a trust-based workplace culture.