The European Parliament on Thursday approved binding pay-transparency rules in a bid to tackle the gender salary gap across the EU.
That will put pressure on employers, who will now have to take more responsibility in being transparent about salaries and fixing gender-based inequalities.
Under the new rules, employers will have to provide employees with access to information on how they determine salaries, broken down by gender.
“Companies with more than 100 employees will have a reporting duty,” Samira Rafaela, a Dutch lawmaker from the Renew Europe group and lead MEP on the file, told POLITICO. If the reporting shows that the gender pay gap exceeds 5 percent, the company will have to rectify it.
Member countries will be able to fine employers violating the new rules and workers will have a right to compensation, the legislation says.
The adopted directive, which was proposed by the European Commission in March 2021, will now have to be formally adopted by the Council of the EU this spring. Countries will then have three years to insert the rules into their national legislation.
The directive also recognizes people identifying as non-binary, which was welcomed by Rafaela.
“This is groundbreaking news. It is the first time in EU legislation history that we have recognized non-binary persons and that the intersectional discrimination will become an aggravating factor,” Rafaela told POLITICO.
The newly adopted directive will also put an end to discrimination in recruitment, as it bans employers from asking about candidates’ previous pay and obliges them to provide a salary range for the position candidates apply for.
Women earn around 13 percent less on average than men in the EU, even though theoretically equal pay has been enshrined in the EU treaties since the creation of the European Economic Community in 1957.
