Pay structures as a key tool for ensuring pay equality

Summary

The research paper "Pay structures as a key tool for ensuring pay equality" by Tomšej, J., scheduled for publication in 2026, focuses on the transformative impact of EU Directive 2023/970, commonly known as the Pay Transparency Directive, on achieving pay equality. The paper likely employs a legal and policy analysis methodology, examining the provisions of the directive and their anticipated effects on organizational pay structures and practices across the European Union. It would analyze how the directive mandates a shift towards greater transparency in remuneration, aiming to dismantle the persistent gender pay gap, which currently stands at approximately 13% across the EU. The paper is expected to delve into the specific requirements imposed on employers, such as disclosing salary ranges in job advertisements, refraining from inquiring about salary history, and making criteria for pay and career progression accessible to employees. The findings of such a paper would highlight the directive's multifaceted approach to combating pay inequality. It would underscore the significance of mandatory gender pay gap reporting for companies above certain employee thresholds, with annual reports for those with 250+ employees and triennial reports for those with 100-249 employees, starting in 2027. A critical finding would be the "5% rule," where employers must justify any gender pay gap exceeding 5% in any category of workers with objective, gender-neutral criteria, or take corrective action within six months. If unresolved, this necessitates a joint pay assessment with employee representatives. The paper would also likely discuss the directive's emphasis on employees' right to information regarding average pay levels, broken down by gender, for comparable work, enabling them to identify and challenge potential disparities. The implications drawn from the paper would be far-reaching for employers, employees, and national legal systems. For employers, it signifies a mandatory overhaul of existing pay structures, HR processes, and data collection to ensure compliance, with a transposition deadline for Member States of June 7, 2026. Non-compliance carries significant risks, including uncapped compensation for discrimination, a reversed burden of proof in legal cases (where the employer must prove non-discrimination), and potential exclusion from public procurement contracts. For employees, the directive empowers them with enhanced transparency and stronger legal tools to assert their right to equal pay. The paper would emphasize that the directive moves beyond voluntary measures, establishing binding legal obligations designed to create a more equitable and transparent work environment across the EU.