In December 2022, a historic agreement was reached between the European Parliament and Member States. For the first time, companies with more than 100 employees will be required to disclose the difference in wages between the two sexes, and if it exceeds 5%, take steps to eliminate it. Making a historical review, since 1957 the European Union (then the EEC) has defined in the Treaty of Rome as a fundamental principle the right to equal pay for equal work between women and men. In 2006, employers are obliged by a relevant directive to take measures to implement the above principle of equal pay. In 2014, on the recommendation of the European Commission, EU Member States are called upon to encourage employers from the public and private sectors, as well as the social partners, to adopt and promote pay transparency policies. Of course, many may already be shaking their heads in disapproval—and rightly so—since little or no effort has been made to close the gender pay gap. Women citizens of the European Union are paid an average of 13% less per hour of equivalent work than men.

It is at this point that the Lernaean hydra of gender equality breeds double heads, for in an attempt to systematically close the pay gap, we are being asked to solve a twofold problem. On the one hand, the purely speculative question “Will the gap eventually narrow if we systematically and coordinated cuts in men’s wages over a period of time?” and on the other hand, “how do we define equal pay for equal work so that we actually take action?”.

The answer to the first question may be obvious in theory, but in practice it seems to be the torment of many businesses trying to limit the growth of men’s wages, since a commensurate increase of more than 10% for women a priori seems extremely difficult. On a purely theoretical level, it should also be noted that the strategies of weakening the party higher on the scale cannot be overcome. In such circumstances, one should not think of limiting education to those who are very high on the educational ladder or who have sufficient skills. Instead, all efforts are focused on empowering those who lack skills and knowledge or lack equal opportunities. Therefore, the basis of the incorrect and inappropriate argumentation is the strategy of reducing the average monthly earnings of the male population. The second question inevitably leads us to the principle of transparency, which guarantees that the gap can be bridged. In the case of salary transparency, this entails a series of procedures within companies that can ensure the rights of employees to receive the necessary information about remuneration.

Businesses with more than 100 employees will be required to disclose the gender pay gap.

With the December 2022 agreement, practical businesses must understand, first of all, that salary transparency is not the same as not paying their employees differently. However, they are intended to formulate policies and procedures that will define the criteria for determining wages and wage increases, while investing in a real and multi-criteria assessment of the wage gap. In this direction, it seems necessary to establish and implement the correct procedure for informing potential and existing employees about the amount of remuneration for their position. Workers will now have the right to receive adequate information not only about their individual pay, but also about the average level of pay for similar work.

*Ms. Katerina Papanikolaou is Head of Skills, Diversity and Inclusion Services at PwC Greece.