Pay Transparency Directive
The Pay Transparency Directive (PTD) will create expansive new reporting and compliance requirements in the EU. We can help you prepare.
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With seven years of experience and a market-leading approach to gender pay gap reporting in the UK and Ireland, we are well placed to support employers across Europe as they prepare for the Pay Transparency Directive and take steps to understand and address pay differences.
Scope of the Pay Transparency Directive
The Pay Transparency Directive introduces a number of new requirements for employers in the EU. We have explained the obligations further in our article.
The Pay Transparency Directive will:
- Employers will have to publish the average gender pay gaps within their organisation (similar the the requirements in the UK and Ireland);
- Employers will have to report gender pay gaps within "categories" of employees (those doing the same work, or work of an equal value);
- Where gaps within any categories are greater than 5%, and these cannot be objectively justified, employers will have to carry out a joint pay assessments. This is a form of compulsory equal pay audit. It must be conducted jointly in consultation with employee representatives.
How to prepare for the Pay Transparency Directive
We suggest two steps to start getting prepared:
- Do early analysis now: Joint pay assessments will be costly and demand considerable time and effort. Avoiding the need to carry out a joint pay assessment will be vital. To do this, you need to make sure gaps within “categories” of employee are not more than 5%, or where they are, ensure there is good evidence of objective justification for the difference. Now is the time to analyse gaps, identify areas of concern, take measures to reduce them to below the 5% threshold, and get the right policies and procedure in place to prevent them recurring.
- Taskforce: Appoint a cross-disciplinary internal team to be responsible for Pay Transparency Directive compliance. Typically that would include members of legal, people/ HR, reward and finance teams, including an executive sponsor.
Pay Transparency Directive support
We can work with you on all aspects of preparation and compliance with the Pay Transparency Directive.
We will tell you what your gender pay gaps are likely to be. We draw on our market-leading gender pay gap reporting work to provide you with insights and intelligence from your data, and give you actionable solutions to bring down gaps. We can identify what the relevant pay gaps are, what gender over/ under-representation issues are causing those gaps, what steps you might take to bring the gaps down, and how you can take those steps.
We can help you avoid the need for a Joint Pay Assessment. We can interrogate your data using the categories you have available, to highlight areas of risk. We can help you establish defences for any differences in pay that cannot be rectified to help you avoid both the need for a mandatory joint pay assessment but also equal pay claims.
Now is the time to prepare for the Pay Transparency Directive. Any issues that you identify will likely take time to resolve, and any delay to Pay Transparency Directive compliance may ultimately consume substantially greater time and resources, as well as risk damaging employee relations. We have the experience and expertise to guide you through early assessment of your data. We can provide informed and actionable advice and solutions.
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