The EU directive on salary transparency changes work: an end to salary secrets, obligations for companies, protections for employees and new risks of litigation and internal tensions.
Salary Big Brother enters the office. Once upon a time, comparisons between salary levels were whispered in the corridors and the truth was the subject of a fierce hunt by those who thought they were paid less than their colleagues. Now, even if the individual’s salary cannot be known, everything will be out in the open, no more secrets about salary levels for the same tasks.
The Council of Ministers approved in preliminary examination the draft legislative decree which transposes Directive 2023/970 of the European Parliament and of the Council of 10 May 2023, on salary transparency which aims to strengthen the application of the principle of equal pay between men and women for the same job or for work of equal value, through pay transparency and related enforcement mechanisms.
According to the Minister of Labour, Marina Calderone, the provision «strengthens the tools to make the law effective equal pay. The text may be enriched in the parliamentary passage and further discussions with the social partners, because the valorisation of everyone’s talent is an essential condition for a modern and inclusive world of work”.
Gender pay gap and obligations for businesses
The goal is to eliminate the gender wage gap (gender pay gap) through greater transparency and protection tools. It applies to public and private employers and concerns, with some exclusions, subordinate workers (including managers and fixed-term contracts), extending in some aspects also to candidates during the selection phase. According to Eurostat data from 2023, women earn on average 12% less than men. Furthermore, this gap has repercussions by turning into a pension gap relevant (beyond 26% on average EU according to Eurostat data from 2024).
Therefore, if the starting point is acceptable, what causes discussion are the tools and the risk unwanted side effects. Under the new rules, employers will have the obligation to provide job seekers with information on starting salary and on salary range of vacancies published. Employers are prohibited from asking candidates for information on salaries received in previous professional relationships.
Workers’ rights and reporting
But above all, once hired, workers will have the right to ask their employers for information on average salary levelsdivided by sex, of the categories that carry out similar activities or of equal value. They may also be requested criteria used to determine the salary and career progression which must be, says the EU directive, objective and neutral from a gender perspective.
Businesses with more than 500 employees they will have to report annually to the competent national authority, on gender pay gap within. For businesses between 100 and 250 employees this communication will take place every three years. When the headcount is under i 100 employees there is no obligation to communicate. If a pay gap were to emerge that was greater than 5% not justified by objective and gender-neutral criteria, companies will be obliged to intervene by carrying out a salary evaluation with the unions. Employees who may have suffered pay discrimination they will be able to have a compensationincluding back wages and related bonuses.
Organizational risks and side effects
This means a organizational burden important for the company that may have to deal with a barrage of complaints. And above all the topic of resources necessary to achieve the objective of equal pay. It will be interesting to see if i collective agreements they will have to take into account the fact that renewals will have to be modulated to fill the existing gap. At the same time there is the risk that a… hornet’s nest of envy and jealousy pitting men and women against each other in managing company salary increases.
For those companies required to communicate, if a difference in salary levels between men and women emerges equal to or greater than 5%the employer would have six months time to fix it.
The risk of overreaction
The theme is understanding how to give the right answers to an issue on which everyone agrees in terms of principle but which will have to be managed with attention and balance. In short, we must avoid the risk of “overreaction”a topic that has come to attention in recent days with the news reported by the New York Times according to which the Nike company’s initiatives in favor of diversity they may have represented a discrimination to the detriment of white workers. Enoc (the American Equal Opportunity Commission) is investigating “systemic allegations of intentional racial discrimination linked to diversity, equity and inclusion programs” against white employees of the sportswear group.
