Under the Directive, reporting and transparency will be required in a number of critical areas.
Gender pay gap reporting and equal pay
Organisations above a certain employee threshold will be required to publish gender pay gap figures externally.
Where a pay gap of 5% or more is found in any category of worker and other criteria are not met, a joint pay assessment must also be completed.
Recruitment
Organisations will be required to provide information on pay ranges as part of the recruitment process and will no longer be able to ask candidates about current pay to determine offers.
Pay approach and philosophy
Employers with more than 50 workers must provide workers with information on what criteria are used to determine pay and pay progression.
Access to information on pay levels
Workers will have the right to request information on the average pay levels, broken down by sex, for categories of workers performing the same work or work of equal value. This must be provided within 2 months of request.
Given the significance of the measures to be introduced, the first step is for organisations to identify their biggest risks and opportunities and prioritise activities. This will allow for the development of an effective change plan that will ensure readiness for the upcoming legislation and wider transparency requirements.
Key questions are:
Do you have a grading structure that will allow you to report by category of worker?
Are you ready to share pay ranges and approach to pay progression?
Are your managers prepared to address questions on compensation?
Do you currently monitor and understand your pay equity risks across the EU?
Are your systems and data able to report in line with the requirements?
Three key actions to take now
For some companies the impact of the EU Pay Transparency Directive will be significant, potentially leading to the widespread transformation of critical people policies and procedures. Successful change (including to impacted systems and processes) is therefore a multi-year programme.
It will be critical for companies to:
- Understand the impact: Identify key stakeholders and gain an understanding of key risks and opportunities concerning remuneration and progression for your organisation.
- Assess organisational readiness: Deep dive into the key risks and opportunities identified through interviews and document reviews. Complete a readiness assessment to prioritise actions with stakeholders.
- Develop an implementation plan: Develop an implementation plan to embed change based on agreed priorities, risks and opportunities around equal pay.
We are here to help you
Our team is here to help you as you work through the detail of the Directive and assess what it means for your organisation. Contact us today.
