Many firms still lack pay transparency, but new rules could change that in Europe.
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Many firms still lack transparency about pay, much to the frustration of employees who want to be sure that they’re paid fairly.
Nevertheless, there are signs of change as pay transparency laws are passed in places like New York, with some firms committing to splitting salary brackets – leading to initial problems resembling sharing huge salary brackets or finding ways across the rules.
In a recent move towards greater transparency, the European Union Parliament on Thursday approved new rules to help employees obtain key salary information.
“Wage secrecy will be banned,” the European Parliament’s press release said, explaining that employers cannot prevent their employees from sharing their pay or checking other people’s salaries. Which means employees may have the correct to access detailed information on individual and average remuneration, including broken down by gender.
“Pay structures to compare pay levels will need to be based on gender-neutral criteria and include gender-neutral job evaluation and classification systems,” the statement reads.
Research has shown that pay transparency is essential to closing the gender pay gap, as women are sometimes less likely to negotiate their pay and have a tendency to underestimate themselves. Knowing how much their associates earn may help alleviate this problem.
Corporations within the EU with a gender pay gap of greater than 5% may have to undergo a pay assessment with worker representatives – and could be fined, the European Parliament said in a press release. Nevertheless, what exact consequences an excessively large gender pay gap may have is dependent upon individual EU Member States.
The new rules say that anyone negatively affected by unequal pay will be entitled to additional compensation.
“This law clearly shows that we don’t accept any gender pay discrimination within the EU,” said Danish EU politician Kira Marie Peter-Hansen, who worked on the new laws.
“Historically, women’s work has been undervalued and underpaid, and with this directive we’re taking a crucial step towards ensuring equal pay for work of equal value,” she added.
Almost half of the countries on the planet do not need laws that oblige firms to pay all genders equally report emphasizes the World Bank. This may increasingly have a negative impact on economic growth, he adds.
The effect will not be limited to individual countries. recent report Moody’s said the gender pay gap could actually cost the worldwide economy up to $7 trillion.
The most recent official data shows that the gender pay gap within the EU was 13% in 2021. In the US, federal figures for that 12 months showed full-time women earning 84 cents for each dollar of men’s wages.
The new rules also include the rights of non-binary people for the primary time and combat inclusive discrimination, underlines Dutch EU politician Samira Rafaela, who also helped arrange the new rules.
“Non-binary people have the identical right to information as men and girls. I’m proud that with this directive, for the primary time in European laws, we now have defined inclusive discrimination and brought it into consideration as an aggravating circumstance when setting penalties,” she said. .
The ultimate step towards making the rules law within the EU is now formal approval by the European Council, i.e. the Heads of State or Government of every EU Member State.