Equal pay for equal work and the gender pay gap

The European Parliament is exploring legislation around pay-transparency measures as a means of supporting equal pay for equal work and addressing the gender pay gap. Researchers found evidence that such measures have a clear potential to address unjustified or discriminatory wage gaps, but certain disadvantages in the approach need to be considered, such as administrative costs and concerns around pay confidentiality.

What is the issue?

The causes of unequal pay between men and women are complex and varied, ranging from undervalued work and skills to stereotypes and discriminatory practices. In 2019 there was an average 16 per cent pay gap between male and female workers across the EU.

The principle of equal pay for equal work is enshrined in the EU treaties and the European Commission has taken measures to address this issue through regulation and soft-measures. Part of this involved encouraging Member States to adopt pay-transparency procedures as a way of revealing potential gender bias and discrimination in pay structures. However, take-up across the EU has been limited.

How did we help?

Researchers examined the pros and cons of binding pay-transparency measures, as well as the existing regulations and wider views around it.

The study was commissioned by the European Parliament’s Committee on Employment and Social Affairs and will help inform the European Parliament’s discussions on binding pay-transparency measures in 2020.

What did we find?

  • Pay-transparency measures have a clear potential to address unjustified or discriminatory wage gaps, allowing employees a better understanding of whether their pay is fair compared to their peers. There are however also disadvantages to the approach, including increased administrative cost for employers and concerns around pay confidentiality.
  • Important factors to consider when implementing pay-transparency measures are enforcement, follow-up actions and the role of trade unions. There are also barriers to overcome, such as a limited understanding among employers and employees of what pay-transparency measures involve.
  • Opinions vary on pay-transparency measures among key EU stakeholders. Those that are fully supportive include the European Parliament and European Commission, while those that oppose them are largely employer associations.
  • The European Commission intends to prepare a legislative proposal for binding pay-transparency measures. In doing so, it will be important that:
    • The proposal seeks the right balance between advancing the principle of equal pay and introducing additional administrative requirements for employers.
    • Any binding measures are accompanied by tools to support implementation.
    • Effective monitoring and enforcement mechanisms are in place to ensure compliance.