First movers experiences with gender pay transparency measures in Europe

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1 First movers experiences with gender pay transparency measures in Europe Dr. Isabella Biletta, Dr. Christine Aumayr-Pintar National Symposium on the Gender Pay Gap Iveagh House, Dublin, 10 January 2018

2 Pay transparency measures In 2014, the European Commission recommended countries to adopt at least one of the following Employees rights to request information on gender pay levels for the same work or work of equal value; Employers duty to report on average gender pay levels by category of employee or position ( Company pay reports ); Employers duty to conduct an audit on pay and pay differentials on grounds of gender ( Pay audits ); or Measures to ensure that equal pay, including pay audits, is discussed at the appropriate bargaining levels. C(2014)1405 final 2

3 Only half of the EU Member States comply with the Recommendation. Employees right to request pay information Company pay reports Implemented Introduced or changed legislation in 2017 FI, IE, NO DE (2017), LT (2017) - AT (2011, in full force since 2014), BE (2014), FR, DK, IT DE (2017), LT (2017) UK (2017) Mature/delayed plans NL (draft law in 2014), IT (draft law from 2015) Pay audits FI (2005, amended in 2014), FR, SE (1994, revised in 2009) SE (2017 revised) IE (2016), IT (draft law from 2015) Promoting collective bargaining on equal pay None of the four pay transparency measures implemented or considered to date Strong incentives : BE, FR Soft incentives : FI, DE, SE BG, CY, CZ, EE, EL, HU, HR, MT, LV, LU, PT, RO, PL, SI, SK. - - Sources: Veldmann 2017, European Commission 2017a, Eurofound

4 Pay reports and audits in four Member States AT DK FI SE Pay inequalities between men and women Bi-annual pay reports since 2011 > 150 employees Average or median pay by job classification No compulsory follow up. No sanctions. Pay secrecy principle. Since 2006: 1. annual wage statistics OR pay report/audit every 3rd year. > 35 employees/10 within same cat. 2014: > 10 / 3 within same cat. 2016: former thresholds restored Obligation to consult employees via shop stewards. Pay auditing as of 2005/2014 Every 2-3 years > 30 employees Employee representative has to be involved; Ombudsman may monitor. 1994: Mandatory annual wage surveys later pay audits; 2009: Every third year. 2017: Annual mapping Analysis of policies on wage and other employment conditions > 10 employees documented analysis > 25 employees: Wage action plan, shared with unions and Ombudsman. - performing the same tasks - performing equivalent tasks in terms of demands and responsibility Between tasks that are female dominated and not female dominated 4

5 Evaluation studies AT 2014: 2 studies Evaluation commissioned by the Ministry (mainly qualitative) Trade union survey among employee representatives (ER) FI 2 studies commissioned by the Ministry 2008: State of pay audits, 2012: Survey on pay auditing among ER and management DE 2011: Evaluation commissioned by the Ministry, mainly based on survey results among ER and management, focusing on compliance. SE 2008: Equal Opportunity Ombudsman, 2016: Equality Ombudsman both qualitative investigations 2015 and 2016: 2 more studies conducted by trade unions 5

6 Findings from the evaluation studies Compliance was often found not to be ideal Qualitative compliance was higher in countries with simpler reporting requirements. There is room for improvement in involving employee representatives Follow-up actions are more likely to take place when they are mandatory, or where substantial pay gaps were uncovered Employees are commonly not aware that the reports exist A critical factor for success are company level actors perceptions and attitudes next to a supportive higher level environment peak level social partners and governments. Measures to create awareness and promote the knowlegde about the instruments among companies and employee representatives are key. 6

7 Compliance often found not to be ideal Higher compliance FI No quantitative data AT No major problems reported SE TU study 7 out of 10 companies 60% % 2011 Public Belief Substantial issues DK 30% only 35% private 7

8 Qualitative compliance higher in countries with simpler reporting requirements AT: Most companies stuck to the legal requirements, some went beyond. DK: The vast majority of compliant companies chose the simpler option and compiled wage statistics, not reports or audits. These met the requirements. FI: High degree of qualitative compliance, only 10% of companies DID NOT provide any categorisation of staff. SE: In 2008 only 10% of inspected workplaces had satisfactory pay audits, in a second round of inspections, 48% had lived up. Trade union research of 2015 concluded that many employers have difficulties producting satisfactory pay audits. 8

9 Room for improvement in involving employees representatives AT 50% involved in preparation 1/3 NOT involved DK 80% informed BUT No mandatory dialogue FI Only 30% ER involved % in 2012 BUT Mainly receiving information 9

10 Follow-up actions more likely when mandatory, or when substantial pay gaps uncovered AT Limited mainly confined to review of salary bands Exception : 80% companies where two types of pay gaps (within pay categories AND vertical gender segregation between categories) FI High 25% reviewed job descriptions, the demandingness of the work or adjusted wages; 20% analysed the gap further and 9% reformed their wage system. 38% of workplaces take any action SE Substantial In 2008: 3,700 employees had their wages raised after the first inspection, 2016: 60% of companies adjusted unjustified gaps. 10

11 Critical factor for success : company level actors perceptions and attitudes AT: Two thirds of ERs see the reports as important additional information for works councils and one third regard them as helpful for individual cases. DK: In non-compliant companies, both sides typically believe that there is no gender pay gap. SE: Many employers regarded the audits as statistical tool, rather than a tool in wage determination processes and: Employers with greater knowledge also had a more positive attitude towards the audits. (Trade union research 2015 and 2016). FI: Reports were considered useful for equality work already at early stages in : 73% of HR managers agreed they were useful. 11

12 Supportive higher level environment All EO: more reluctant to agree on proposed measures than TU Reasons: administrative burden and costs Polarised SP views AT DK Involvement of the SP SE TU more supportive but acknowledge increased burden for employers FI 12

13 What can be learnt from the first movers? Design of the measures: Making some components of the process compulsory and enforceable (i.e. involvement of ERs, follow-up, sanctions for non-compliance) Sufficiently detailed information within the reports /key starting point for meaningful analyis and further action. Roll-out phases: Phased roll-outs seem to work well and allow gradual learning and adaption. Technical support, trainings etc. for companies and ERs in the early roll-out phases can help to improve compliance and create positive attitudes. Social partners are key to provide this support. Evaluation: Evaluate the implementation continuously and adapt. Promote a conducive climate of and interest among actors: What s in for companies, when they ensure equal pay? 13

14 References All sources and references can be found in the accompanying report: Eurofound (2018), Pay transparency in Europe: First movers experiences with gender pay reports and audits, forthcoming. A draft version of the report has been disseminated at the event. Any further questions? Please contact Christine Aumayr- Pintar, Eurofound: cau@eurofound.europa.eu Thank you for your interest! 14

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