Pay transparency directive to require companies to report differences between genders

The European Parliament's Committee on Employment and Social Affairs (EMPL) and Committee on Women's Rights and Gender Equality (FEMM) has voted to approve the long-awaited European Union-wide Pay Transparency Directive.

The vote represents a “landmark day for gender equality”, according to MEP Maria Walsh.

The Midlands-North-West representative was the Fine Gael MEP (EPP) negotiator on the Directive. As the only Irish MEP involved in the negotiations, Walsh fought hard for the introduction of binding pay-transparency measures. “Ireland’s Gender Pay Gap Information Act, introduced in 2022, requires companies to report differences in pay between genders and close the gap. It is a measure and movement that is long overdue, but very welcome,” she stated.

“As a result of this Act being introduced in Ireland, all companies – public and private – with 250 or more employees in Ireland are required to report annually. This will fall to 150 in 2024 and 50 in 2025. The requirement encompasses full-time and part-time employees as well as employees who are on leaves of under 12 months. The EU Pay Transparency Directive complements the measures already introduced by Ireland,” continued MEP Walsh.

“This has gone on for far too long. The right to equal pay for the same work – or work of equal value – between female and male workers has been a founding principle of the European Union since the 1957 Treaty of Rome. Nonetheless, the gender pay gap in the EU remains at 13 per cent, according to the latest Eurostat findings. The gender pension gap in the EU is even worse, standing at 30 per cent. The lack of pay transparency has created a grey zone favouring the perpetuation of gender bias in the setting of salaries. Today, we have reached a major milestone in the fight for equality,” said MEP Walsh.

“This year marks the 50th anniversary of the lifting of the Marriage Bar in Ireland – a requirement for single women to resign from their job upon getting married and disqualifying married women from applying for vacancies. In some ways, it’s hard to believe that this was once the case for Irish women, but if we look at the major inequalities that still exist, we are forced to ask – ‘how far have we really come, until now?’.”

In line with the provisional agreement on the Pay Transparency Directive, companies will be required to disclose salary information to allow employees to compare salaries and expose existing gender pay gaps. “Pay secrecy will also be banned and employers will not be allowed to restrict workers from disclosing their pay. As well, for the first time, intersectional discrimination and the rights of non-binary persons have been included within the scope of the new Directive,” she continued.

Yesterday’s vote, according to MEP Walsh, brings us a step closer to eradicating the pay gap across Europe. The Directive will complement the measures already taken by 17 Member States who are currently supporting Pay Equality Measures and ensure they are enacted across the EU.