In this article:
- What does the employee’s right to pay information mean in practice?
- What is work of equal value, and how is it defined?
- How is information on average pay shared with employees while preserving anonymity?
For a wider look at the Pay Transparency Directive, read our complete info pack: EU Pay Transparency Directive: Info Pack for Employers
Employees gain the right to pay comparison information — what does that mean in practice?
Going forward, an employee can request information about their own pay level and has the right to know how their pay compares to colleagues doing the same work or work of equal value. The criteria for pay and pay progression should be available and understandable to all employees — not only when they’re specifically requested.
Employees have the right to receive pay information within a reasonable time, and no later than two months from the date of the request. Employers also have an obligation to remind employees of this right annually, and to explain how the right can be exercised. That makes it important to put clear processes in place inside the company.
It’s recommended that the organisation builds one clear channel through which employees can exercise the right and request pay information, and that staff are guided on how to use it. That keeps the process clean and manageable, and makes it easy for the employer to meet the obligation.
Talking about pay can no longer be banned — not even by contract
The directive coming into force means more open conversations about pay. Individual salaries don’t automatically become public, but employers also can’t prevent employees from discussing their own pay going forward. The directive prohibits contract clauses that would stop an employee from freely sharing their salary — for example with colleagues. That can’t be banned in the employment contract or via non-disclosure agreements.
What is work of equal value, and how is it defined?
The directive requires that employees are paid the same for the same work or work of equal value, unless any pay difference can be justified on gender-neutral grounds. That means the organisation has to be able to define what counts as work of equal value. The recommended approach is to build pay grades on top of an objective scoring framework. Once the pay grades are in place, each role in the organisation is mapped to the appropriate grade based on the scoring.
How is information on average pay shared with employees while preserving anonymity?
The directive’s obligations don’t mean that individual salaries are made public — but employees do have the right to receive pay information for comparison. In practice, average pay information for a larger group of employees can be shared, broken down by gender. The directive doesn’t set an exact minimum number of people per gender required to preserve anonymity in reporting. The recommendation, however, is at least five people per gender when reporting average pay — unless local legislation requires something different. If it’s a small organisation or only a small group does the same work and individual privacy would be at risk, the information can be provided to an employee representative — for example, a shop steward — who assesses whether pay is fair.
Employer’s checklist: things to handle when it comes to the right to information
- Define equal-value work: build a clear, objective pay grade model for your organisation, and assess which grade each role belongs to. Consider whether grades should be defined by location or country if the same work is done across regions or borders.
- Open up the criteria for pay decisions: make sure the basis for how pay is set and how it progresses is clear, objective, and available to all employees.
- Set up a clear process for information requests: make sure HR or managers have the resources and tools to respond to requests within the timeframe required by the directive.
- Protect privacy: make sure average pay is reported in a way that doesn’t accidentally reveal an individual’s salary — this is especially important in small teams or organisations.
- Forget pay secrecy: remember that you can’t stop employees from talking about their own pay with each other. The directive prohibits pay secrecy clauses in employment contracts.
How is the right to information secured in practice?
Once information requests start coming in from employees, the employer needs to be ready to respond within the timeframe required by the directive. If a large organisation receives many requests at the same time and has no process or tools in place to respond, the result can be total chaos. Doing the work manually takes huge amounts of HR and leadership time, and the risk of mistakes goes up.
It’s worth building a clear process for responding to information requests, and a good tool to support it is worth its weight in gold. Evenpay is a software solution that helps companies and organisations meet the obligations of the Pay Transparency Directive and provides a long-term foundation for compensation work. With the platform, things like job evaluation, pay band modelling, and secure data reporting all happen in one place. Administrative work decreases, clear processes make it easy to respond to information requests quickly, and the risk of unjustified pay gaps emerging is minimised.
Want to hear more about Evenpay? Schedule a free 30-minute demo and we’ll walk through how Evenpay helps prepare your organisation for the Pay Transparency Directive.
For a wider look at the Pay Transparency Directive, read our complete info pack: EU Pay Transparency Directive: Info Pack for Employers
