The Directive[i] to strengthen the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms entered into force on 6 June 2023.
Member States, including Poland, are obliged to transpose it by adopting national implementing legislation by 7 June 2026 at the latest.
The Directive does not directly confer any specific rights or impose any obligations on the parties to an employment relationship. Such obligations must be derived from the legislation adopted by each country.
Elimination of the pay gap and greater pay transparency
The Directive has two main objectives.
The first is to eliminate the gender pay gap, i.e. to structure the pay system so as to ensure equal pay.
The elimination of pay discrimination is to be achieved by:
- Establishing transparent, accurate and fair pay-setting mechanisms and pay rules
- Public disclosure of information on pay rates offered for a given job
- Monitoring of employers by public authorities with regard to the existence of the pay gap
- Requiring employers to take corrective action where a pay gap is identified
The second objective of the Directive is to introduce greater transparency and openness in pay for all employees, regardless of gender.
However, the aim of the new rules is not to standardise pay.
The principle of equality does not aim to set identical salaries for all employees in the same positions, regardless of other factors (criteria) such as professional experience or skills. The Directive allows for discrepancies in salaries, provided that any differences are based on objective criteria that are independent of an employee’s gender.
Who will be covered by the Equal Pay Directive
The Directive will cover:
- Job applicants
- Employers in the public and private sectors (regardless of the size of their workforce)
- All workers who have a contract of employment, including workers:
-
- working part time
- employed on a fixed-term contract
- employed by temporary work agencies
- trainees
- apprentices
- employed otherwise than under a contract of employment
- in management positions
- in an employment relationship as defined by national law
-
* The employment relationship will be proven by the facts showing its actual existence, not by the way the parties describe their contractual relationship.
Employers’ main obligations under the Directive
Establish and apply mechanisms for comparing (valuing) work
The employer should formally evaluate the work, i.e. check which positions are related to the same, comparable or different work.
This comparison should be based on objective and gender-neutral criteria set out in the Directive, i.e.:
- Skills
- Effort
- Responsibility
- Working conditions
- Other factors which are relevant to the specific job or position (provided they are not directly or indirectly discriminatory)
- Soft skills
As some pay components are awarded for periods longer than one month (e.g. quarterly bonus, annual bonus based on achievement of targets, etc.), equal pay will be assessed on an annual basis.
Ensure easy access to the criteria and mechanisms used to determine the pay structure and the rules for pay progression
The employer will be obliged to give employees access to the principles on which the pay structure has been developed.
In practice, this means access to information on the criteria used to compare jobs, as well as on pay levels and pay progression.
Employers with fewer than 50 employees may, but do not have to, be exempt from this obligation.
Inform employees about their pay level and their rights
Employees have the right to request information and the employer is obliged to provide a written response on their individual pay level and the average pay levels, broken down by sex, in relation to categories of workers performing the same work or work of equal value.
Once a year, the employer will have to inform employees of their right to such information and explain how to obtain it.
Ban on confidentiality clauses
Employers will not be allowed to include pay confidentiality clauses in contracts.
In practice, this means that employees will be free to disclose information about their pay, but only for the purpose of enforcing equal pay.
Obligation to disclose salary at the recruitment stage
Applicants will have the right to ask their prospective employer about the salary level or initial salary range offered for a particular position and the relevant collective agreement/remuneration regulations/pay policy provisions relating to that position.
Obligation to report on the gender pay gap
Employers will be required to submit reports including on whether there is a gender pay gap in their organisation.
Companies with up to 99 employees will not be subject to the reporting obligation, although national law may introduce such an obligation or propose voluntary reporting.
Monitoring obligations (joint pay assessment)
Obligations to remedy imbalances if pay inequalities are identified
Consequences for the employer in the event of non-compliance
The employee’s right to compensation or reparation
An employee who has suffered pay discrimination is entitled to back pay, including bonuses, payments in kind, interest on arrears and compensation for lost opportunities.
Financial sanctions on the employer
Financial sanctions can include a fine, as well as a ban on access to public subsidies, financial relief or credit relief.
Summary
Given the amount of work required to implement a transparent equal pay policy, it is worth starting to prepare now, for example by checking whether the current system meets the requirements of the directive or whether it may need to be changed. We are here to help if you have any problems.
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[i] Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023
