The end of an era: Workers’ paychecks will no longer be a secret. To close the gender pay gap between men and women, Italy will need to transpose a crucial European directive by 7 June 2026. The new rules will concern staff research, selection and recruitment processes, and above all salaries. In fact, employees of public and private companies will be able to know how much their colleagues earn and claim compensation if they receive lower wages for the same jobs. Let’s try to understand better.
Women in the EU earn 12.7 percent less than men
In Europe, women still earn 12.7 percent less than men doing the same job (Eurostat 2021 data), but the principle of equal pay is enshrined in Article 157 of the Treaty on the Functioning of the EU. There has been little reduction in the gender pay gap in Europe over the past decade: from 16.4 percent in 2012 to 13 percent in 2020. This still huge gap exposes women to a greater risk of poverty and also contributes to significant differences in pensions, with a disadvantage of around 30 percent in 2018. And so Europe developed EU directive 2023/970 to promote equal pay for men and women. It was published in the EU Official Journal in May and entered into force today. Italy, which is among the European countries with the lowest gap rate (5 percent difference between the two sexes, see table), will have to implement it by 7 June 2026. A curiosity: Parti Fratelli d’Italia (Fdi) Giorgia Meloni opposed the directive throughout the legislative process, then chose to abstain in the final vote.
EU Directive 2023/970: What It Provides
First of all, job offers should be made without gender discrimination, secondly, selection procedures should be conducted in a non-discriminatory manner. But the real news is about what happens after recruitment, with the prohibition of salary secrecy, or rather the “right to information”. This is a rule that establishes the right of employees to know the salary of their colleagues, but above all the right to claim compensation for their losses from the company if the paycheck for the same tasks is lower. In summary, workers and their representatives will have the right to “request and receive written information about their individual wage levels and the sex-disaggregated average wage levels of categories of workers doing the same job or work of equal value”. .
The employer must respond within two months at the latest from the date of the request, and “if the information received is inaccurate or incomplete, workers have the right to request clarification, clarification and more, either in person or through worker representatives.” Reasonable details of the data provided and a reasoned response”. There is also a specific prohibition on the inclusion of contractual clauses provisionally created by companies to prevent employees from disclosing information about their salary.
Reporting obligation of companies
The EU directive adopted to combat wage discrimination also imposes the obligation to disclose the wage levels of men and women in large companies. In particular, those with more than 250 employees will be required to report annually to the competent national authority on the gender pay gap in their organisation. Smaller companies with more than 150 employees will have to do this every three years, and this obligation will be extended to companies with more than 100 employees two years after the last transfer date of the directive.
What if the report shows a pay gap of more than 5 percent? If this difference is not justified on the basis of objective and gender-neutral criteria, companies will have to act on a joint wage assessment in collaboration with workers’ representatives.
For whom does EU directive 2023/970 apply?
With these new rules, employers will have the incentive to equalize the salaries of employees working in the same job. However, the directive is not designed solely for wage discrimination based on sex, i.e. between men and women, it has also been extended (for the first time) to include intersectional discrimination, i.e. discrimination based on a combination of various forms of inequality or disadvantage: gender and ethnicity or sexuality. It also includes provisions to ensure that the needs of persons with disabilities are taken into account.
The new obligations of the EU directive apply to everyone, both for employers in the public sector and employers in the private sector. “This Directive – states Article 2 – shall apply to all workers who have an employment contract or employment relationship as defined by law, collective agreements and/or practices in force in each Member State, taking into account the case-law of the European Union”.
Right to compensation
And then comes the most interesting part: In case of discrimination, you have the right to compensation. In fact, EU Directive 2023/970 specifies that workers who are subject to wage discrimination can receive compensation, including “full recovery of debts and related bonuses or payments in kind, compensation for missed opportunities, non-pecuniary damage, damage from other causes”. relevant factors, which may include intersectional discrimination as well as default interest”. Finally, in the event of a dispute, the employer will need to demonstrate that it has not violated European rules on gender pay gap and pay transparency.
Job postings should indicate the salary offered
Among the many important innovations that will be introduced by this EU directive, which aims to increase wage transparency, is the obligation for employers to provide information on the starting salary. In other words, the job postings will include the job postings and requirements of the candidates, as well as the salary offered. In addition, the directive prohibits asking candidates for information about their previous employment relationships.
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Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
