Nordic inspiration behind new EU directive

The provisions in the new proposed directive are aimed at making it easier to discover if employers do not provide equal pay for equal work, and for those who feel discriminated against to have their claims tried in court. Some examples: 

• A job seeker should be informed about the initial pay level or its range without having to ask for this information. The employer is not allowed to ask prospective workers about their pay history.
• Workers must be told which criteria the employer uses to set pay levels and career opportunities. The employee should also have the right to access information about how her own pay compares to the average pay, and about pay levels between genders for groups of employees who do equal work or work of equal value.
• Each year employers with at least 250 employees must publish detailed statistics on the pay gap between female and male workers on their website. If the gender pay gap is five percent or more, the employer must also carry out a pay assessment in cooperation with workers’ representatives (trade unions in the Nordic countries) to see whether the gap is due to breaches of the equal pay principle. If the employer cannot justify the gap on objective gender-neutral factors, the employer will be obliged to correct the problem.  
• The proposed directive also contains several legal provisions which mean workers who feel discriminated against can take their case to court without risking high legal fees. It will be the employer who has to prove that there was no discrimination in relation to pay, and any doubts should benefit the employee.  

Unlike the controversial directive on adequate minimum wages, this new proposal says nothing about pay levels. Hence, it is also not quite so controversial in the Nordic region.

Nordic inspiration

The European Commission’s preliminary investigations also pointed to good experiences with pay transparency rules from Denmark and Sweden. If the proposal is adopted as it stands, the provisions will in fact be considerably more detailed than what is the case in those countries.  

Consequently, it is Danish and Swedish private sector employers who have voiced opposition to this being regulated at all on an EU level. They argue the Commission yet again is wading into an area that belongs to the social partners.

Reactions from trade unions have so far more non-committal. They are positive in principle to increased pay transparency but are still busy analysing the text in order to see whether it leaves the social partners' freedom of contract in peace. It is not wildly improbable that they will find some of the many detailed rules to be disproportionate.