Pay Equity Starts with Transparency

Employee’s Right to Information

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What is the Employee's
Right to Information?

The EU Pay Transparency Directive stipulates that employees have the right to written information about their individual pay - total compensation - and the average pay levels for their specific Category of Workers, broken down by gender. It is the duty of the company to inform the employee annually of this right and how they can exercise it, and upon request the company must provide the answer within no more than two months. In case the information given to the employee is inaccurate or incomplete, they have the right to ask for a substantiated elaboration. The request can be made by the employee or by a representative on their behalf. 

A Category of Workers consists of employees that perform the same work or work of equal value, which allows an apples-to-apples comparison regardless of differences in working patterns. Objective criteria should be employed to this categorization and include skills, effort, responsibility and working conditions weighted by their relative relevance for the job position. If there is no real-life comparator, a hypothetical comparator should be applied. The employee can also use external information, e.g. statistics, to assess whether they are experiencing gender-based pay inequity.   

The other element of the Employee's Right to Information is that employees have the right to disclose their pay, rendering any contractual terms prohibiting this disclosure invalid. However, the employee may only use the information to exercise their own right to pay equity.

Naturally, companies could proactively choose to provide employees with information on their individual compensation page and how it compares to the average of their relevant Category of Workers. Such proactive behavior - although necessitating a well-developed job architecture and documentation procedures - could turn out to be an advantage for your company.

Questions to Consider

  • Do you have a Job Architecture that defines your Categories of Workers in gender-neutral terms?
  • Are you ready to answer question about salaries and total compensation packages regardless of who asks?
  • Do you have a setup for informing your employee of their rights?
  • Do you have any cases of unexplained gender pay gaps that could potentially lead to lawsuits?
  • ..and are you ready if it happens?

Right to Information

Burden of Proof lies with the Company

A significant element of the directive is that the burden of proof lies with your company to prove that an employee is not experiencing gender-based pay discrimination. 

If an employee suspects pay discrimination, they have the right to request relevant information either personally or through a representative. If it turns out that the employee has been discriminated against, they have the right to full retroactive refund of salary, bonusses and other related benefits, as well as compensation for lost opportunities and distress caused by undervaluation of the work they have performed. Member states are not allowed to fix an upper limit for this compensation.

Please note that the local legislation may differ slightly once implemented, incl. penalties for discrimination.

What is Job Architecture?

A Job Architecture is a structure or hierarchy of jobs that encompasses levels, titles, career progression paths and compensation programs based on job value. This is the foundation for identifying gender pay gaps and answering employee inquiries as to how their pay relatively compares. 

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