Under the status quo, women in the European Union would have to wait another 63 years, or so, for equal pay. In 2021, they made on average 12.7% less in hourly earnings than men — a gap that narrowed just 0.2 percentage points from the year before, according to a recent report. Hoping to speed up the march to equality, the EU on Thursday approved the Pay Transparency Directive, a series of reforms for employers across its 27 member-nations aimed at closing the gender pay gap. The legislation borrows ideas already in place in a number of cities and countries around the world. Similar to measures recently rolled out in New York City and other parts of the US, firms will have to provide information about the pay level or range when advertising open positions. Companies will also have to publish the difference between what men and women are paid every year, something that was established in the UK a few years ago that Japan and Australia have also adopted. Employers won't be allowed to ask prospective workers about their pay history either. In addition, national governments will have to put penalties, such as fines, in place for companies that report gender pay gaps of at least 5% — if they can't give a good reason for the disparities. These systems aren't without their flaws. Employers have used a broad interpretation of NYC's pay transparency laws to retain some secrecy. And over in the UK, as of 2022, the gap has barely budged in the five years since its reporting requirement was introduced. However, there's optimism that the EU's plan will be more effective because it combines a series of measures. "We're seeing a clear trend of global harmonization in regulation," said Zev Eigen, the founder and chief scientific officer of workplace equity platform Syndio. "For European employers, there's a lot of work on the horizon." —Olivia Konotey-Ahulu |
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