How the EU fuels resentment or strives for greater pay equity while simultaneously putting renewed pressure on the European economy and burdening it with additional costs!
Directive (EU) 2023/9701 "for strengthening the application of the principle of equal pay for men and women for equal work or work of equal value through pay transparency and enforcement mechanisms" (Pay Transparency Directive) was adopted with the aim of reducing the existing gender pay gap and ensuring equal pay for women and men for equal work. Austria must transpose the Pay Transparency Directive into national law by 7 June 2026. To date, there is no draft law. The political dispute within the government coalition is boiling.
The Pay Transparency Directive covers all employees – from full-time and part-time employees to temporary workers and employees in management positions. "Pay" is understood to include, in addition to salary and wages, all additional remuneration received by the employee directly or indirectly in cash or as benefits in kind. This includes, among other things, termination payments, bonuses, company pensions, etc.
The Pay Transparency Directive comprises four key requirements:
For sanctions, please see the end of this article!
Employers already have certain information and disclosure obligations during recruitment. All job applicants must then be informed about
This includes information on the entry-level salary or its range and the criteria for salary determination. This information must be provided before the job interview. Furthermore, applicants may not be asked about the salary level or development of their previous employment.
However, this is not new: Section 9 of the Equal Treatment Act (GlBG) already obliges employers to state the statutory or collectively agreed minimum remuneration for the advertised position in job advertisements. We eagerly await to see how the Austrian legislator will now implement the EU directive and, if necessary, tighten the existing regulation!
Employees have the right to request information about their own remuneration level and the average earnings of colleagues who perform equal or equivalent work. They must not be prevented from disclosing their remuneration to others.
The following obligations arise from this:
The employer must provide transparent information on how remuneration is determined, increased, and developed. Employees must be informed about the criteria for determining remuneration and its development. The standard for this must be objective and gender-neutral criteria. Furthermore, depending on the number of employees, the employer is obliged to regularly report on the gender pay gap.
The report must include the following information:
The intervals at which the employer must submit a report depend on the number of employees. Reporting is required:
Income reports must be submitted to the national monitoring body; the Austrian legislator will have to define who this national monitoring body is in the implementing law.
The Pay Transparency Directive leaves open whether pay comparisons are only to be made for the individual company or also at group level . Therefore, it remains to be seen whether the Austrian legislator will legally address this open question. According to the directive, a comparison of employees is possible even if they are not employed by the same employer, provided that the employees are in a comparable situation3.
Also new is the "joint pay assessment": Under this, companies subject to reporting requirements Employer together with the employee representatives to carry out a "joint pay evaluation" if there is a difference of at least 5% or more among a group of employees performing the same or equivalent work. To eliminate objectively unjustifiable inequalities, measures must be introduced to address them. However, such measures may be omitted if objective, gender-neutral criteria justify the pay gap or if it is corrected within six months of reporting.
In cases of suspected pay discrimination, employees can claim compensation. The claim also includes non-material damages4, lost opportunities, and extends to full restitution.
The full burden of proof lies with the employer if they fail to fulfill their information and reporting obligations.
The Statute of limitations is three years. Furthermore, employees can seek an injunction to prevent violations of the right to equal pay.
Authorities and courts may, in the event of violations of pay obligations, where appropriate, impose penalty payments and fines .
1 of the European Parliament and of the Council of 10 May 2023.
2 The gender pay gap is the difference between the average pay levels of female and male employees of an employer, expressed as a percentage of the average pay level of male employees.
3 Recital 29 of the Directive states in this regard: The [European] Court of Justice has clarified that, for the purpose of assessing whether workers are in a comparable situation, the comparison is not necessarily limited to situations where men and women work for the same employer (Court of Justice judgment of 17 September 2002, Lawrence and others, C-320/00, ECLI:EU:C:2002:498). Workers may be in a comparable situation even if they do not work for the same employer, where the pay conditions are attributable to a single source which lays down those conditions and where those conditions are equal and comparable. This may be the case where the relevant pay conditions are governed by legislative provisions or agreements which relate to pay applicable to several employers, or where the conditions are centrally determined for more than one organisation or more than one establishment of a holding company or a group of undertakings. Furthermore, the Court of Justice has clarified that the comparison is not limited to workers employed at the same time as the complainant (Court of Justice judgment of 27 March 1980, Macarthys Ltd, C-129/79, ECLI:EU:C:1980:103). Moreover, when carrying out the actual assessment, it should be recognised that a difference in pay may be explained by factors unrelated to sex.
4 However, this already applies currently under Section 26 of the (Austrian) Equal Treatment Act.
