67% of workers excluded from EU equal pay policy

Two thirds of European workers would be excluded from pay transparency measures under the proposals made by the European Commission, its own data reveals.



Binding pay transparency measures were one of the flagship policy promises of the von der Leyen Commission and, after a 460-day delay, it finally published a draft gender pay transparency directive last spring. But the impact of the directive risks falling far short of its promise because of the Commission’s decision to limit gender pay reporting to organisations with over 250 staff.



That would mean just a third of European employees would be covered by pay transparency, according to figures buried in the Commission’s impact assessment. The impact would be even weaker in the member states which have the largest gender pay gaps, Estonia and Latvia, just one in five workers would be covered by the pay transparency measures proposed by the Commission.



The countries where EU pay transparency measures as they stand would have the lowest impact:

Even in France, which has the highest number of workers in large organisations, the measures would cover less than half of employees. It is one of just three member states where more than 35% of workers would be covered.



As well as significantly reducing the impact of its own pay transparency promise, the Commission’s threshold undercuts national legislation in 12 member states where pay reporting already applies to organisations with between 50 and 150 employees. Only Germany has legislation with a higher threshold than the one proposed by the Commission.



The Commission argues the threshold is needed to limit the cost of the policy, but its impact assessment shows the cost of pay transparency reporting falls significantly after the first year. In the first year, it would cost each employer on average between €315 to €500, but this decreases to less than €100 in subsequent years.



The ETUC are highlighting the figures as part of a week of action aimed at improving the draft gender pay transparency directive during its passage through the European Parliament. We are calling on members of the FEMM and EMPL committees to remove the 250-employee threshold when they consider the legislation later this month.



ETUC Deputy General Secretary Esther Lynch said:



“The Covid crisis made the undervaluation of jobs predominantly done by women clearer than ever, with low paid women making up the majority of essential workers. Pay transparency could be a powerful tool for ending Europe’s shameful 14% gender pay gap.



“But the Commission are trying to have their cake and eat it when it comes to equal pay, saying all the right things to underpaid women workers while watering down the directive behind the scenes at the behest of corporate lobbyists.



“As it stands, too many employers will be able to continue masking the fact they pay men significantly more money for doing work of the same value as women. The right to equal pay should not depend on the size of the company you work in. It’s now down to MEPs to make sure that this directive actually makes a difference for workers, no matter what size of company they are in.



“The principle of equal pay has been enshrined in the European treaties since 1957. Women have already waited long enough for meaningful EU action to make that a reality.”



Notes

A threshold of 250 would be a backward step for many countries, who have lower thresholds (50+ or lower) in place:  BE, DK, EE, ES, FI, FR, LT, LU, PT, SE, AT (150+), IT (100+).