Attorney Loreta Andziulytė, a partner at the international law firm ECOVIS ProventusLaw, explains that due to the lack of transparency in the amount of wages, a situation arises in organizations where gender discrimination and gender bias may go unnoticed or be difficult to prove.
Therefore, in order to increase pay transparency and eliminate direct and indirect discrimination in the field of pay, the aim is to establish mandatory measures, encourage organizations to review their pay structures to ensure equal pay for men and women doing work of equal or equal value, and provide conditions for victims of discrimination to exercise their right to equal pay.
“However, the application of the principle of equal pay does not mean that employers cannot pay different wages to employees doing work of the same or equal value, if they are based on objective, gender-neutral and impartial criteria, such as performance results,” explains L. Andziulytė.
The current salary does not interest a potential employer
All workers will have to be given the right to receive information about their own wages and average wages, and employers will have to provide such information within a specified time. Employees will no longer be prohibited from disclosing their salary in order to ensure compliance with the principle of equal pay.
“Employment contracts now often include provisions that salary is confidential information. And after the implementation of the directive, contractual clauses limiting the right of employees to disclose information about their wages will be prohibited. But employers can demand that employees, after receiving information about wages, not use that information for any other purposes,” says L. Andziulytė.
In addition to the requirements, there is also an important insurance for employers. They will not be able to ask job seekers about their current or previous employment. In order to ensure this requirement, recruitment practices and job interview scenarios will have to be updated.
Additional transparency requirements
One of the most important transparency measures provided for in the directive is the obligation for employers to report on the pay gap between female and male employees. Employers with 100 or more employees will be required to provide such notifications on a regular basis. However, the directive foresees that this obligation will be introduced gradually.
Employers with 250 or more employees will have to do so from 2027 at the latest. on June 7 and annually thereafter. Employers with 150-249 employees no later than 2027. on June 7 and every three years thereafter. Employers with 100-149 employees no later than 2031. on June 7 and every three years thereafter. Importantly, EU member states will be able to exempt employers with fewer than 50 employees from the obligation to increase wages.
If it is determined that the gap between men’s and women’s wages for equal work will be at least 5 percent. and the employer will not be able to justify this difference by any objective criteria and will not correct this difference within 6 months from the date of submission of the notification, the employer will be obliged to carry out a general wage assessment in cooperation with the representatives of the employees and eliminate unjustified differences. In the event of a dispute, the employer bears the burden of proving the absence of direct or indirect wage discrimination.
For employers – only an obligation, or an opportunity to separate?
For employers, the new directive means new obligations and prohibitions. However, director of WitMind, a company that studies employer competitiveness, Živilė Valeišienė says that conscious employers are already at least partially living up to the obligations of the new directive, and thus they gain a competitive advantage.
“Those employers who will look at the directive more responsibly, start applying it without waiting for the legislators, will be seen as more honest both by their existing and potential employees. In other words, they will become more competitive, which is extremely important today, when the fight for workers in the market is intense,” says Ž. Valeišienė.
According to her, employers need to think about responding to employees’ expectations and experiences through enhancing a sense of fairness. The National survey of all employees conducted by the company, during which 3322 respondents were interviewed throughout Lithuania, showed that honesty, respect for employees and their evaluation in a broad sense are among the most important attributes.
“On the topic of remuneration, we often see employees using the word ‘unfair’. Thus, internal justice, transparency and honesty in communication would greatly strengthen the employer’s position. Honesty, its expression through rewards and through emotional benefits (such as respect, appreciation, recognition of merits, etc.), is among the three most important expectations of the country’s employees from the employer,” the interviewer said.
2024-08-29 14:06:29