EU directive: Gender pay to be equalised by 2027

by   CIJ News iDesk III
2024-04-24   08:45

By 2027, wages between men and women will be equalised. Some companies are already meeting the requirements of the new European regulation

Same work, but different pay. According to data from the Statistical Office of the European Union, the current wage gap between women and men across segments, professions and jobs in the Czech Republic is 17.9% on average. The amended EU directive is set to change this. From June 2027, companies with more than 250 employees will have to report annually that they do not make a pay gap. The novelty envisages transparency already during the recruitment interview. The IT and business services sector is the most ready for the change. According to a survey by ABSL, a high 93% of companies already use a system that allows salary analysis in line with future EU requirements.

Maximum difference of 5%, objective assessment criteria.

Although Eurostat puts the Gender Pay Gap in the Czech Republic for 2022 at less than 18%, the results of the latest analysis by show a much larger gap - an alarming 28%. Its research also shows that the pay gap increases with length of work experience. Women in the Czech Republic with up to one year of experience earn on average 20% less monthly salary than men. For women with between 6 and 10 years of work experience, the difference is as high as 30%, which in practice means more than CZK 20 000 per month.

"If the pay gap for any category of employees doing the same job exceeds 5% and is not explained by objective factors, employers will have to conduct a joint review of the causes of the pay gap with employee representatives and share the results with employees and the relevant authorities," explains Petr Boldiš of Mercer, and continues, "The systems we offer allow companies to efficiently meet the new reporting requirements while gaining valuable information for internal remuneration reviews." He says firms should not delay in preparing, as the adjustments will be time-consuming for many firms in terms of aligning internal systems and ensuring they have sufficient budget to rectify the differences.

The directive also specifies that when evaluating and comparing equivalent work, employers should take into account objective criteria such as education, professional and training requirements, skills, effort and responsibility, work performed and the nature of the task.

Identical remuneration? A legitimate requirement.

Mandatory reporting awaits companies with more than 250 employees from June 2027, which will have to report annually. From the same year, companies with 150-249 employees must also report every three years. Companies with 100 to 149 employees have until 2031.

"In general, the approach to pay equalisation is mainly taken by corporate companies that have already experienced the process in their countries of origin, or those companies for which equal pay is an internal value. Among the sectors where the principle of equal pay is implemented we can mention e.g. corporate services, retail, telecommunications, banking, but also manufacturing or logistics, especially for lower or medium skilled positions," says Martin Malo, Director of Grafton Recruitment.

Superior transparency and equality in IT and business services.

Even without regulation, the IT and business services sector, which honours equal pay and transparency, has gone against the changes. According to an ABSL survey, as many as 93% of companies already use a system that analyses pay according to the directive's criteria. On the issue of transparency, 15% of companies in this sector are even considering publishing all relevant information, 85% only those required by regulation.
According to Iveta Chválová, director of one of the largest SAP Services business service centres in Prague, the key to ensuring fair remuneration is to have a well-set system and to be transparent. "At SAP, we use our own solution, thanks to which 99.8% of employees have immediate access to information about what the pay range is for their position, taking into account their specific level of seniority and the region in which they work. Our leaders have a detailed infrastructure that eliminates the room for subjective interpretation of data or remuneration based on impressions and feelings," Iveta Chválová explains.

US-based companies also have a head start, as many of the equal pay rules coming into force in the EU are already in place in these organisations. "At Pure Storage, pay transparency already exists because we publish the salary ranges of our employees in their positions, which is not the local standard. The main way we are preparing for this new legislation is to ensure our existing policies cover all the new EU regulations and we are confident that this will be a smooth transition for us," explains Monika Krkošková, Senior HR Business Partner at Pure Storage.

The approaches and tools used by the IT and business services sector offer inspiration for other sectors and confirm that transparency and equality are key values for the future of the labour market.

Source: CTK

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