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The New Wage Transparency: the beginning of the end?

By 25 Abril, 2023Maio 4th, 2023No Comments

Last March 30th, the European Parliament plenary voted and approved the latest directive on wage transparency, thus taking another step in the fight against secrecy and gender wage discrimination, increasingly seeking to ensure the applicability of the famous principle, equal pay for equal work.

This directive will implement various measures to increase wage transparency as well as surveillance monitors, among which is the obligation to disclose information on wage disparity between employees and the consequent correction of the same, when it is unjustified and equal to or higher than 5%, in companies with a minimum of one hundred employees.

In terms of recruitment processes, there are measures such as a requirement to disclose, in the job advertisement the salary range for the position in question, as well as a ban on asking applicants about salaries earned in previous jobs, and job advertisements must be gender-neutral and conducted in a non-discriminatory manner.

Given the current reality, the question arises as to the relevance and practical applicability of such measures, since we are encountering an increase in prohibited questions to be asked to the candidate during the recruitment process, seeming to contradict the overall idea of “salary transparency” underlying the directive itself.

Since the Directive considers that such information may result in a discriminatory recruitment process, it gives the candidate greater bargaining power, but the employer is not limited and may choose to offer other benefits. After all, it is only a matter of providing the candidate with all the necessary information, so that he or she can make a conscious and informed pre-selection of the vacancies that interest him or her and for which he or she wishes to apply.

It is also worth mentioning that this directive will, for the first time, include references to non-binary people, so that they will have the same individual right to information as men and women.

In a Europe where wage transparency is considered one of the main obstacles to closing the gender pay gap, are these measures enough? Will they have the expected practical applicability? Will we finally see the beginning of the end of wage discrimination between men and women?

Marta Valente Coelho @ DCM | Littler