Directive (EU) 2023/970 of 10 May 2023, aimed at strengthening the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms, was published in the Official Journal of the EU on 17 May 2023 and entered into force on 7 June 2023 (the “Directive”).
The Directive imposes transparency and reporting obligations on both public and private sector employers. It applies not only to all employees but also to job applicants in selection processes.
New obligations for employers
Information on the transparency of remuneration
The Directive addresses the issue of pay transparency, both during the employment relationship and prior to recruitment. In particular, employers will have to:
- provide job applicants with information on the initial pay level or a corresponding range (based on objective and gender-neutral criteria) in relation to a specific position or job. Employers will not be able to ask applicants about their pay history during their former employment relationship;
- make available to workers a description of the gender-neutral criteria used to define their pay and career progression.
Reporting on the gender pay gap
Employers will also have to make available to all their employees and to the employees’ representatives information on the gender pay gap, including in particular:
- the gender pay gap;
- the gender pay gap in complementary or variable components;
- the median gender pay gap;
- the median gender pay gap in complementary or variable components;
- the proportion of female and male workers benefiting from complementary or variable components;
- the proportion of female and male workers in each quartile pay band;
- the gender pay gap between workers by categories of workers broken down by ordinary basic wage or salary and complementary or variable components.
Frequency of the report will depend on the number of workers:
- employers with 250 or more workers should provide information on the gender pay gap by 7 June 2027 and every year thereafter.
- employers with between 150 and 249 workers should provide this information by 7 June 2027 and every three years thereafter.
- employers with between 100 and 149 workers should provide this information by 7 June 2031 and every three years thereafter.
- employers with fewer than 100 workers should provide information on pay when required by Member States.
Workers ‘rights
Right to information
The Directive also deals in-depth with workers’ right to information during the employment relationship. Workers will be able to request, through their representatives, information concerning their individual pay levels, average pay levels, broken down by gender, for categories of workers performing the same work or work of equal value to that which they do.
Defence of rights
Better access to justice for victims of pay discrimination will include:
- judicial procedures to enforce the rights and obligations relating to the principle of equal pay;
- the right for equality bodies and workers’ representatives or other legal entities to act on behalf or in support of a worker, and for them to bring collective claims to court;
- the shift of the burden of proof to the employer when employees who consider themselves wronged establish facts from which it can be presumed that there has been direct or indirect discrimination, or where an employer has not implemented the above-mentioned pay transparency obligations;
- the limitation period for bringing a claim should be at least three years;
- specific penalties for infringements of the equal pay rule, including fines.
Right to compensation
Any worker who has suffered damages as a result of a breach of a right or obligation relating to the principle of equal pay will have the right to claim and obtain full compensation or reparation.
Protection against reprisals
It is explicitly stated that workers and their representatives shall not be treated less favourably and shall be protected against dismissal or other adverse treatment by an employer in response to a complaint within the employer’s organisation or to any administrative procedure or court proceedings aimed at enforcing rights or obligations relating to the principle of equal pay.
Next step
Luxembourg must transpose the Directive into national law by 7 June 2026 at the latest. We will keep you informed when a draft law will be submitted to the Luxembourg Parliament (Chambre des Députés).
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