What employees must know about the EU Pay Transparency

One of the biggest challenges we face when searching for a job is to ensure equal and transparent practices within the company you’re applying for. But don’t worry, the European Union is here to address this prominent challenge.

On average, women in the European Union earn 12.7% less per hour than men, which means they need to work an extra 1.5 months each year to match men’s earnings. Despite some progress in pay equity in the tech industry, our Global Tech Talent Trends 2024 report shows that there is still work to be done. In Portugal, the gender pay gap has increased by 36%, particularly in management roles, compared with 34.9% last year and 16.2% in 2022. 

Due to this ongoing issue, the European Council announced a new directive, the EU Pay Transparency. This directive aims to fight the lack of pay transparency and change the communication between current and prospective employees by establishing a set of mandatory guidelines that companies must follow in totality by 2026.

Understanding candidates’ and employees’ rights under the EU Pay Transparency  

Designed to address pay discrimination and close the gender pay gap, here is what it means for you:

• Salary disclosure: Job descriptions must disclose the starting salary or salary range in their job ads or before the interview.
• Pay History: You can ask about the salary history for the role, but employers are not allowed to ask about your salary background.
• Post-Hire Information: Once employed, you can see the salary ranges within the company and understand how career progression is determined.
• Compensation:  If you experience pay discrimination, you’re entitled to compensation, including back pay and any related bonuses.
• Proof of Compliance:  Employers, not you, are responsible for proving compliance with pay transparency rules. Those who don’t comply will face penalties.
• Intersectional and Disability Discrimination: The Directive addresses discrimination that occurs when multiple factors (like gender and disability) intersect and ensures that workers with disabilities are also considered.

What does it entail for you? 

To advocate for fair pay and equality, the EU Pay Transparency Directive aims to create fairer and more transparent workplaces across the EU.

By raising awareness and promoting transparency, this directive ensures a more equitable experience for both current and prospective employees in the job market.

If, on the other hand, you are an employer and want to know more about companies’ responsibilities regarding the EU Pay Transparency directive, read all about it in this blog article!