The Pay Transparency Decision of 30 March in the European Parliament strengthens workers’ rights to equal pay by imposing new obligations on employers. This new directive is further proof that efforts to achieve gender equality require women’s equal access to and treatment in the labor market as a sine qua non. The solution focuses on two main pillars:

Measures to ensure wage transparency for employees and employers.

Measures to improve access to justice for victims of wage discrimination.

In terms of wage transparency, the measures come into effect from the moment you look for a job. Employers are required to provide information about starting salary or job range in this publication or prior to the interview, and will no longer be able to ask candidates about their salary history. Employees will also have the right to information, i.e. they will be able to ask employers for information on their level of pay and the average level of pay by sex, as well as the level of pay for similar work. Finally, starting in 2027 (Fiscal Year 2026 data), employers with more than 250 employees will be required to publish annually information about the potential gender pay gap between the two sexes working in their company.

The decision of the European Parliament strengthens the power of workers in terms of the right to equal pay.

Companies with more than 100 employees will be required to publish relevant information every three years. In fact, if the gender pay gap is at least 5% and the employing company cannot substantiate it with objective, gender-neutral factors, it must, in cooperation with employee representatives, conduct a wage assessment. In these cases, workers affected by gender pay discrimination will be able to receive compensation, with the employing company, and not the employee, now by definition required to prove non-discrimination in pay.

And while the obligation to publish data seems at a safe distance, three years (until 2027) is not that long when you consider the changes companies will have to plan and implement in terms of payroll transparency. Pay systems and indicators for assessing equal pay for work of equal value, methodological tools for determining pay ranges by position and hierarchical levels, matrix models for assessing pay depending on gender, age, education, length of service in the company, as well as total length of service, and a clear outline of roles, skills, and responsibilities are complex concepts and probably not easy to implement. The (potential) pay gap must be a key business priority and requires the collaboration of many departments outside of HR to ensure that pay is truly competitive and that the pay gap is not justified by demographics or a large skills gap. .

The key steps for businesses are to register and analyze the wage gap immediately, while taking corrective action with long-term benefits. The new solution leaves no room for companies to make one-off small adjustments, so careful analysis of payroll data is key to meeting the new commitments.

Ms. Katerina Papanikolaou is the Head of Skills Development, Diversity and Inclusion at PwC Greece.