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Written by Benjamin Morand
The pay gap between women and men in the European Union remains concerning, reaching 13% in 2020. This gap varies significantly between member states and has only decreased very little over the last decade. Several factors contribute to this disparity, including sexist stereotypes, the maintenance of the “glass ceiling” and the “sticky floor”, as well as horizontal segregation, with a overrepresentation of women in low-paid service jobs.
Moreover, the unequal sharing of family responsibilities plays a significant role. Discrimination, whether direct or indirect, in terms of pay based on gender, also exacerbates this gap. These structural obstacles pose complex challenges to achieving pay equality and quality jobs. In the long term, they lead to consequences such as pension gaps and a feminization of poverty.
In order to combat these gender inequalities, the European Parliament and the Council published in May 2023 the directive (EU) 2023/970, which aims to strengthen pay equality between men and women for the same work or work of equal value, in accordance with Article 157 of the Treaty on the Functioning of the European Union. It should be noted that all the changes highlighted are based on the definitions of worker and remuneration under European law. A worker under European law therefore refers to any person who has a contract with a company, organization, or individual, regardless of the nature of the contract. Interns, apprentices, and domestic workers are therefore included in this definition. Remuneration, for its part, encompasses not only salary but also complementary or variable components, in cash or in kind.
This article therefore aims to summarize the contributions of this new directive and to understand what the main levers for companies to act are.
What changes does this directive bring?
1) Transparency of compensation
Employers must ensure pay transparency at several levels:
- Before hiring: They are required to inform candidates about the initial salary or the salary range expected for a position.
- During employment: Workers can request information about their salary and about the pay gaps between men and women for positions of equal value.
2) Communication of pay disparities
Companies with at least 100 workers must publish reports on the pay gaps between men and women, including the variable and fixed components of remuneration.
The largest companies (250 employees and more) must publish these reports annually, while the smaller ones (100 to 249 employees) must do so every three years.
3) Joint evaluation of compensation
When pay gaps exceed 5% without objective justification, employers must conduct a joint assessment with worker representatives to correct these inequalities.
4) Protection and recourse
Workers are protected against any discrimination or retaliation related to requests for transparency or actions to enforce equal pay. The directive provides for remedies in case of violations, including simplified judicial remedies and the right to compensation.
5) Role of organizations for equality
EU member states must designate equality bodies responsible for monitoring the implementation of the directive, assisting employers in evaluating pay, and supporting workers who are victims of pay discrimination.
6) Reversal of the burden of proof
The concept of "reversal of the burden of proof" is a key concept of the directive. It is an important legal provision in the context of equal pay. This means that, in cases where an employee presents factual elements indicating possible pay discrimination, it is not up to them to prove the discrimination, but rather the employer must demonstrate that there has been no discrimination, and that the difference in treatment is justified by objective, neutral, and non-discriminatory criteria.
In the context of pay inequalities between men and women, this mechanism facilitates access to justice for employees, as proving pay discrimination can be difficult without transparency on pay criteria. This reversal helps restore balance by shifting the responsibility to the employer.
7) Sanctions
Member States must provide effective, proportionate and dissuasive sanctions in case of non-compliance with transparency and equal pay obligations, such as fines or exclusion from public procurement for offenders.
What measures should be implemented within a company?
To prevent these risks of pay inequalities, companies have several concrete levers at their disposal to act.
1) Detect discrepancies through reporting
Before taking action, it is necessary to regularly analyze the company's situation by establishing indicators to examine pay gaps between men and women.
2) Awareness and training
In order to prevent pay inequalities, training on equal pay for managers and HR leaders regarding the issues of pay equality can be an effective way to prevent unconscious biases in salary decisions and promotions.
3) Promotion of diversity in recruitment and promotion processes
Acting for inclusion in the workplace, also means ensuring that recruitment and promotion processes are free from sexist biases. Using practices such as CV anonymization or establishing mixed recruitment committees can help avoid them.
4) Sanctions and remedies
Establishing an internal complaint mechanism for employees is an effective way to allow them to report any pay discrimination or inequality of treatment. This mechanism must be confidential.
It is also possible to provide for internal sanctions against those responsible for pay inequalities or discrimination.
5) Stakeholder Engagement
L’engagement des parties prenantes est un élément clef du sujet. Celui-ci peut s’obtenir à travers l’obtention de certifications ou de labels, en embarquant tous les acteurs de l’entreprise. Les labels "Égalité professionnelle" ou "Diversité" de l’Afnor sont des exemples possibles.
In summary, the directive imposes concrete measures to improve the transparency of remuneration, reduce wage gaps, and ensure enhanced access to justice for victims of wage discrimination, while strengthening employers' obligations regarding respect for gender equality in wages. Companies, for their part, have means to act to prevent wage inequalities, notably through the prevention and analysis of remuneration indicators.
If responsible remuneration interests you, feel free to watch the replay of our workshop on the subject :