Salary negotiations have traditionally been based, at least in part, on the negotiation skills of both parties. The EU Pay Transparency Directive, however, requires pay to be based only on objective criteria, so people doing the same work or work of equal value must, as a starting point, be paid the same. Pay must be justifiable with transparent, objective criteria.
Negotiation skills are no longer grounds for a pay difference
In the past, pay may have been based on what the candidate dared to ask for and what the employer was willing to pay. Although pay can still be discussed, it can no longer be determined by negotiation skills.
The criteria for setting pay must be objective. They can include, for example, workload, level of responsibility, skills and working conditions. Being a good negotiator is not an objective criterion. If two employees do the same work in the same conditions with the same level of skills, they must be paid the same, regardless of which of them knew to ask for more during recruitment.
Read more about how the Pay Transparency Directive changes recruitment!
What can and can’t you ask a candidate about pay?
Under no circumstances may you ask a candidate about their current or previous pay. This covers not only direct questions and conversations, for example in a job interview or salary negotiation, but also mandatory fields in your recruitment system. A candidate’s pay history must have no effect whatsoever on how their pay is set. The aim is to stop pay gaps that arose earlier, often along gender lines, from carrying over from one workplace to the next. Although you may not ask about previous pay, you can still ask about salary expectations, and the candidate can state them.
Pay criteria must be transparent – how do you justify a salary offer?
The directive does not require you to justify an individual salary offer to a candidate, but the grounds for the offer should be clear. If pay discrimination is suspected, however, the burden of proof is on the employer. If a candidate has asked for, say, €4,000 a month and the offer is €3,500, an open justification makes the conversation easier and builds trust.
When the criteria for setting pay are clear, the salary offer is easy to justify, for example like this: “The base salary for this role is €3,300. Your expertise in a specific system, which is significant for this role, adds €200. That brings us to a salary of €3,500.”
Employer’s checklist for salary negotiations
- never ask a candidate about their current or previous pay
- you can still ask about salary expectations
- the criteria for setting pay must be clear and objective
- negotiation skills cannot be a criterion for setting pay
- you must be able to explain and justify the pay in a salary offer with objective criteria.
Evenpay is a software solution designed to support and simplify a fair, equal pay culture. It automates the requirements and reporting of the EU Pay Transparency Directive and helps organisations identify and remove unjustified pay gaps. Evenpay also gives you a ready salary offer based on predefined objective criteria that are accepted under the Pay Transparency Directive. That makes conversations about how pay is set easy.
Want to hear more about Evenpay and see how it would work with your organisation’s data?
