New EU rules will force large companies to publish annual statistics on the pay differences between women and men and be open about pay scales when recruiting new staff.
n a draft law published yesterday, the European Commission said firms with more than 250 workers should publish annual, anonymised figures on the gender “pay gap”, including bonuses and benefits.
They should also reveal the “proportion” of men and women in each pay band.
Smaller companies will also be obliged to provide the same information to employees, but only on request. They will not be required to make it public.
“Women must know whether their employers treat them fairly. And when this is not the case, they must have the power to fight back and get what they deserve,” said European Commission President Ursula von der Leyen.
The EU says entrenched gender bias around pay is one of the main reasons women in the EU earn 14pc less than men, on average.
In Ireland, the pay gap was 14.4pc in 2018, according to Eurostat, but rose to over 20pc in Estonia and Germany. The EU believes the figures would be even higher if public sector workers were stripped out.
Commission vice-president Vera Jourova said the rules are “heavily needed” because there has been very little progress on closing the gender pay gap, with only a 2pc improvement over the last five years. The proposal aims to tackle the “systemic undervaluation of women’s work” which has persisted despite the right to equal pay being laid down in EU law for more than 60 years.
Under the rules, employers will be prevented from asking interviewees about their pay history and must inform applicants about pay ranges prior to any job interview.
They won’t be able to include pay confidentiality clauses in employment contracts.
Average pay differences of 5pc or more will trigger a company-wide “pay assessment” and could lead to compensation claims being taken through the courts.
However, all fines and penalties would be left up to national authorities to decide, with equality bodies and employee organisations closely involved.
Siptu said the rules will not help eliminate pay differences and must be changed to remove the 250-employee threshold.
“While the directive aims to reduce secrecy on pay, it does not provide the practical tools necessary to negotiate and address the glaring pay inequalities that exist for women workers,” said Siptu deputy general secretary Ethel Buckle.
“If recent rates of progress are anything to go by the women of Europe and Ireland will have to wait another four generations for equal pay. That is not acceptable.”
Currently, 13 EU countries have binding pay transparency rules in place.
Leo Varadkar’s government published a Gender Pay Gap Information Bill in 2019, which was recently reintroduced and is currently awaiting Government amendments.
“The EU pay transparency measures will be reviewed in the context of the bill and existing policy on addressing the gender pay gap,” said a spokesperson for the Department of Children, Equality, Disability, Integration and Youth.
Fine Gael MEP Frances Fitzgerald urged the government to act “promptly, so that Ireland can lead the EU in this field. The imperative lies with the government”.
The EU draft will have to be agreed by the bloc’s 27 governments and a majority of the European Parliament’s 705 MEPs before it can become law.
EU countries would then get two years to translate it into national law.
However, a nine-year-old proposal to have a minimum of 40pc women on company boards has been blocked because of opposition from a slew of countries – including Nordic states that have their own binding rules in place.