Opening remarks by Vice-President Jourová on the proposal for a directive to strengthen the application of the principle of equal pay for equal work through pay transparency and enforcement mechanisms

I am very pleased to present a proposal for a directive on binding pay transparency measures. Our main aim is to end the discrimination in pay and ensure equal pay for equal work.

The gender pay gap in Europe is stubbornly stuck at 14%; this is why we decided to do something about it.

Naturally, the gender pay gap has many causes, but the pay discrimination is one of the most despicable one: equal work deserves equal pay whether performed by a woman or by a man.

It is such a truism that we really should not need to keep repeating it in 21^st

We cannot keep pretending that the gender pay gap only stems from women choosing childbearing over a career, that they prefer working in lesser-paid jobs, or that they are simply less interested in moving up on the career ladder…

There is more to it than that.

We know that there is a discrimination of women in pay setting mechanisms and valuation of women's work.

In addition, lack of pay transparency has made it so far impossible for workers to know how much other workers, doing the same job, earn.

And it was hindering them to claim their rights for equal pay for equal work.

This proposal is targeted and proportionate aiming at removing some of the causes for pay discrimination and ultimately support workers and job seekers who are often in a much weaker position when negotiating with employers.

When I talk to younger people on the labour market, especially those looking for a job, they often don't know what salary range they can expect or demand. Especially if they get a job offer after doing countless internships. And then the employers often ask for a previous pay and offer you 10% increases, for instance regardless how much similar positions are paid.

Finally, studies show that women tend to be more humble when negotiating a salary, also because often they don't know how much they can ask for. I hear it in my conversations, but this is a trend, not individual cases.

So our new proposal targets the imbalances that workers know too little and do not enforce their right. In our proposal, workers will have a right to get information. Employers will have to make pay transparent; they will not be allowed to ask for previous salary. They will have to simply think if discrimination based on gender is something that is taking place in their organization.

And for employers who will refuse to change discriminatory practices, we are strengthening the confidence of workers to act, including to demand compensation in front of the court, either individually or collectively.

I am convinced that making pay transparency a reality will benefit both businesses and workers, both women and men.

It does not tie the hands of businesses, it leaves the same flexibility; it just forbids discrimination based on sex.

We also made sure that the costs on employers are not heavy. The obligation on pay reporting applies only to larger firms with more than 250 employees and the annual cost of reporting are estimated to be from €379 to €890.

How can I be so certain that this proposal will benefit both businesses and workers? Because it exists in some EU countries already and some companies introduced similar measures themselves.

What did we learn from these experiences? That pay transparency will improve the image of the company and motivation of many workers.

Also, regular reporting on pay mechanisms may help employers to identify hidden or non-intentional pay inequalities and take appropriate measures to iron out the pay gap.

For example, in Finland, employers with more than 30 workers carry out a pay audit every two to three years.

In Sweden, companies report and provide a mandatory mapping of wages for all employers, every year.

And in Germany, workers in organisations employing more than 200 staff, have access to the wages of their peers of the opposite sex doing the same jobs.

I think this proposal is even more important in the Covid pandemic. Women are disproportionately affected by the pandemic. Their overrepresentation in lower paid sectors and occupations, such as for instance hospitality, retail, or personal services, has made them particularly vulnerable in the labour markets struck by the COVID-19 crisis.

We can't let to reinforce the existing bias and undervaluation of female work, we need to act to put women into the equal footage when it comes to pay for the same work as men.

On the other hand, we also know that businesses are struggling and we don't want to increase a burden on them.

This is why our approach is balanced and put an emphasis on empowerment of worker to claim his, or rather her right.

To conclude, this proposal is pure pragmatism and good economics.

Calculations from before the pandemic showed that gender equality - beyond matters of equal pay - would boost EU's wealth (GDP) per capita from 6% to more than 9% by 2050. This is economic stimulus we cannot ignore.

On that very positive note, let me pass the floor to my colleague and Commissioner for Equality, Helena Dalli i, who will explain more in detail how we intend the new directive on pay transparency to work in practice.