The aim of the directive is to make pay structure more transparent and reduce the gender pay gap.
Pursuant to the directive draft agreed on between EU Member States and the European Parliament, employers will have to review pay structures in their organisations. Applicants must be provided information on the pay level or range before the job interview. In addition, employees must be provided with the criteria on which their pay is based. Employees are entitled to additional information on their individual pay level and the average pay level of employees doing the same work or work of equal value.
Organisations with at least 100 employees will have to publish data on the gender pay gap in their organisation. The final agreement provides for a so-called gradual approach: employers with more than 250 employees will report annually on the pay gap in their organisation, starting no later than one year after the transposition of the directive (ie presumably in 2027); employers with 150–249 employees will report every three years, also starting one year after the transposition (ie presumably in 2027); employers with 100–149 employees will report every three years, starting no later than five years after the transposition (ie presumably in 2031). Pursuant to the draft directive, if there is a difference of at least 5% in the average pay of men and women that cannot be justified by objective criteria, and if the unjustified differences are not remedied within six months, the organisation must review its pay principles.
Estonia has contributed to the reduction of the pay gap and agreeing on the minimum rules needed to ensure equal pay, negotiating to ensure that pay transparency obligations are as simple, clear and unambiguous as possible and that reporting requirements are not overly burdensome. In order to support employers, we and Statistics Estonia are developing a digital tool to analyse the gender pay gap. Palgapeegel (‘Pay Mirror’) will allow for automated analyses of pay gap indicators in organisations, based on register data. This digital solution will also help employers determine the objective and gender-neutral factors of the pay gap and, if necessary, identify potential unjustified differences. The platform will therefore also make it possible to significantly reduce the burden of the directive on employers. Palgapeegel will be available to all employers regardless of the number of employees.
The agreed draft will now be sent to the European Parliament and the Council of the European Union for a final vote. The directive must be implemented into Estonian law within three years of its adoption.
Agni Aav
Ministry of Social Affairs
+372 6269 281
[email protected]
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