Opinion on Pay Transparency

Executive Summary

• Ursula von der Leyen, President of the European Commission, has committed to introduce binding pay transparency measures in her political guidelines. This Opinion is the first response of SGI Europe to the new Proposal for a directive to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms.

• SGI Europe acknowledges the importance of the principle of equal pay and the role that pay transparency plays in its implementation. However, in order to tackle the gender pay gap, one must look further than wage setting. SGI Europe supports a dual approach that takes a broad and holistic perspective through specific actions alongside gender mainstreaming. The interconnection between working conditions and living conditions: work-life balance, opportunities for full and part-time work, parental leave and the sharing of unpaid domestic work, intersection of various axes of discrimination and the impact of occupational segregation need to be taken into account when addressing the gender pay gap.

• The extensive and far-reaching obligations for employers that are introduced, are likely to create a considerable administrative and financial burden. The detailed and complex nature of the proposal and legal uncertainties that raise numerous questions make it extremely difficult for employers to anticipate the impact the proposal may have on their activities and to know how and when they have fulfilled their obligations.
• Furthermore, SGI Europe is concerned that these unclarities and the detailed requirements will affect national labour market models and the capacity and autonomy of social partners to maintain, negotiate, conclude, and enforce collective agreements in accordance with their tradition. Collective agreements with gender neutral wage setting criteria are easily accessible in many Member States and monitored by the social partners negotiating, revising and updating them. As agreements are formulated by well aware representatives of both workers and employers, it can and should be presumed that they are non-discriminating and do respect equal pay. Acknowledging the transparency already delivered by collective agreements, SGI Europe maintains that the Directive should provide for clear facilitations for employers bound to such agreements.
• SGI Europe considers that the proposal, as it stands now, does not sufficiently respect the principles of proportionality and subsidiarity. The final text of the directive should include sufficient flexibility and should respect the different traditions of the Member States and the autonomy of social partners, not only at national, but also at sectoral and local level.
• Conclusively, SGI Europe agrees that the equal pay agenda should be promoted so that men and women are paid equally for the same work. There must be an ongoing focus on whether the employee’s gender influences the level of pay, as a distortion in pay on the grounds of gender does not benefit either employees or enterprises, but for all the reasons mentioned above the proposal must be scaled down.
• SGI Europe is committed to being a constructive partner when dealing with this important proposal. Therefore, in the appendix to this opinion, one will also find initial specific questions and remarks concerning several of the proposal’s key articles and suggestions for change.