The gender pay gap in the EU stands at 12.7%, the last time it was measured in 2021 and has only changed minimally over the last decade. It means that women earn 13.0% on average less per hour than men. The gender overall earnings gap, that measures the combined impact of the average hourly earnings, the monthly average of the number of hours paid (before any adjustment for part-time work) and the employment rate, stood at 36.7% in 2018.
Why do women earn less?
The gender pay gap measures a broader concept than pay discrimination and comprehends a large number of inequalities women face in access to work, progression and rewards. Around 24% of the gender pay gap is related to the overrepresentation of women in relatively low-paying sectors, such as care, health and education. Highly feminised jobs tend to be systematically undervalued.
Then there’s unequal share of paid and unpaid work. Women have more work hours per week than men but they spend more hours on unpaid work, a fact that might also affect their career choices. This is why the EU promotes equal sharing of parental leaves, an adequate public provision of childcare services and adequate company policies on flexible working time arrangements.
Female managers earn even less
The position in the hierarchy influences the level of pay: less than 8% of top companies’ CEOs are women. However, managers are the very profession wherein the largest difference exists in hourly earnings in the EU. On average, female managers earn 23% less than their male counterparts. “In some cases, women earn less than men for doing equal work or work of equal value even if the principle of equal pay has been enshrined in the European Treaties since 1957.”
New legislation adopted by 427 votes to 79
It appears things could now finally change, however. New legislation will require EU companies to disclose information that makes it easier for employees to compare salaries and to expose existing gender pay gaps. Under the rules, adopted by Parliament’s plenary by 427 votes to 79 against and 76 abstentions, pay structures to compare pay levels will have to be based on gender-neutral criteria and include gender-neutral job evaluation and classification systems.
Vacancy notices and job titles will have to be gender neutral and recruitment processes led in a non-discriminatory manner.
As part of what will change under the new legislation, vacancy notices and job titles will have to be gender neutral and recruitment processes led in a non-discriminatory manner. According to the directive, if pay reporting shows a gender pay gap of at least 5%, employers will have to conduct a joint pay assessment in cooperation with their workers’ representatives. Member states will have to put in place ‘effective, proportionate and dissuasive’ penalties, such as fines, for employers that infringe the rules.
Right to claim compensation
The directive also states that a worker who has suffered harm as a result of an infringement will have the right to claim compensation. For the first time, intersectional discrimination and the rights of non-binary persons have been included in the scope of the new rules. Under the new rules pay secrecy will also be banned. The rules stipulate that workers and workers’ representatives will have the right to receive clear and complete information on individual and average pay levels, broken down by gender. Pay secrecy will be banned and there should be no contractual terms that restrict workers from disclosing their pay, or from seeking information about the same or other categories of workers’ pay.
Shift in the burden of proof
On pay-related issues, the burden of proof will shift from the worker to the employer. In cases where a worker feels that the principle of equal pay has not been applied and takes the case to court, national legislation should oblige the employer to prove that there has been no discrimination. “Not only do we finally have binding measures to tackle the gender pay gap, but also all citizens of the EU are empowered, recognised and protected against pay discrimination. Non-binary people have the same right to information as men and women”, said Samira Rafaela, member of the European Parliament and member of the Women’s Rights and Gender Equality Committee.
“Historically, women’s work has been undervalued and underpaid, and with this directive we take an important step to secure equal pay for work of equal value.”
The Council will now have to formally approve the agreement before the text is signed into law and published in the EU Official Journal. The new rules will come into force twenty days after their publication. “This legislation makes it crystal clear that we do not accept any kind of gender pay discrimination in the EU”, said Kira Marie Peter-Hansen, member of the European Parliament and member of the Employment and Social Affairs Committee. “Historically, women’s work has been undervalued and underpaid, and with this directive we take an important step to secure equal pay for work of equal value.”