EU directive ends salary secrecy, boosts pay transparency

A new European Union directive on pay transparency is set to dismantle salary secrecy, aiming to finally achieve equal pay for equal work between men and women. Employees in Italy, Malta, Slovakia, and Lithuania now have significantly more insight into their colleagues' compensation, and job advertisements are required to disclose salary information.

The directive, proposed by the European Commission in 2023 as part of the Gender Equality Strategy, seeks to reduce the existing gender pay gap. It effectively ends salary secrecy by mandating that job postings and interviews include salary ranges. Workers can request data on the average pay of colleagues performing the same job, categorized by gender. Employers are also prohibited from asking candidates about their previous salary history.

"For years, salary was under a veil. That veil not only hid the gaps but also reproduced them," said Member of the European Parliament Gabriele Bischoff. "Someone who was once underpaid carried that low salary from job to job, because every new employer would ask: 'How much do you earn now?', tying their offer to that."

“

For years, salary was under a veil. That veil not only hid the gaps but also reproduced them. Someone who was once underpaid carried that low salary from job to job, because every new employer would ask: 'How much do you earn now?', tying their offer to that.

Member states had until June 7 to transpose the directive into national law, but only Italy, Slovakia, Malta, and Lithuania met the deadline. Most countries missed the deadline, delaying the directive's application. Despite the principle of "equal pay for equal work" being enshrined in EU law since 1958, a gender pay gap persists, with women in the EU earning, on average, 11.1 percent less per hour than men. This disparity also leads to a 25 percent gap in pensions, increasing the risk of poverty for older women.

The European Commission attributes this gap primarily to systemic barriers to transparency rather than differences in education, occupation, or workplace. The disparity is particularly pronounced in the private sector, where confidential salary agreements are common. Women constitute 66 percent of part-time employees and 91 percent of those taking career breaks for childcare, practices that can allow employers to quietly slow the salary progression of returning mothers. Sectors dominated by women, such as care and education, also systematically offer lower wages. "Information changes power in other ways; when a worker can request the average salary for their role broken down by gender, and when the burden of proof falls on the employer, it can drive change," Bischoff emphasized. The directive introduces stricter enforcement measures.

“

Information changes power in other ways; when a worker can request the average salary for their role broken down by gender, and when the burden of proof falls on the employer, it can drive change.