Bolstering equal pay protection in the European Union countries is the goal of the authors of the directive on pay transparency. It comes into force in 2024. What provisions for employees and employers are there? What measures are envisaged to strengthen equal pay? Will IT recruitment also change as a result of the new law? What will change for recruiters and candidates? What should a recruitment specialist know?
The salary transparency directive and IT recruitment in Poland
The principle of “equal pay for equal work” is the overarching goal of the new European Union directive. It is the source of important changes. EU Salary Transparency Directive implementation is planned in 2024. A proposal to work on the new law was made by the European Commission in 2021. The European Parliament has recently backed salary transparency measures. However, MEPs are suggesting that the proposal be strengthened even further. There is still some time until 2024. Employers and HR specialists should be aware of the upcoming changes. Accordingly, IT recruitment planning should take into account the changes in the law.
IT recruitment process changing in light of the new regulations
Being aware of the changes and taking them into account in recruitment planning is a must. IT recruitment and the EU Pay Transparency Directive are important changes in both the recruitment process and the labor market. Each recruitment team should take them into account.
First, the directive means greater transparency for anyone looking for a job. When applying for a job, a candidate will have the right to information about the starting salary level or its range. This information must be based on objective, gender-neutral criteria. Moreover, the salary level or its range must be indicated already in the job advertisement or otherwise prior to the interview. The candidate must receive it without having to request. This is the first major change for employers.
Second, throughout the recruitment process, the employer will not be able to ask candidates about their previous pay. The lack of inquiries about pay history is intended to ensure that there is no inequality at the hiring stage. In order to comply with the new law, the employer will have to consider changing policies and procedures. If IT recruitment is the job of hiring managers or HR team, their training should be updated.
Third, according to the directive, employees will have the right to request pay information. This includes information on both their individual pay level and the average pay level. It will be possible to demand information on pay by gender for employees doing the same work or work of equal value to their work. For the employer, this means the need to prepare for the possibility of categorizing staff in this manner. Preparing to respond to such requests from employees, the employer must prepare to collect such data.
IT recruitment solutions – new requirements not only for recruiting consultants
Reduced threshold for information obligations and salary assessment
The first requirement is a lowered threshold for information obligations. An employer with at least 50 employees must publicly report certain statistics on the gender pay gap in the company. This is a huge change. Just compare the new requirements with current regulations, such as in the UK. Reporting gender disparities obligation falls on employers with more than 250 employees.
The new directive also introduces a requirement to conduct a pay assessment. What does this mean? For example, the report reveals a gender pay gap of at least 2.5%. The employer cannot justify it with gender-neutral factors. A salary evaluation in cooperation with workers’ representatives will then be required. Employers can already take steps to understand the gender pay gap in their companies. They can also start taking steps to improve the situation. If the gap is more than 2.5%, action should be taken to improve the figures. These send a positive message to candidates and employees.
Prohibit pay secrecy
The new directive prohibits keeping pay secret. Currently, some employment contracts restrict employees from disclosing pay information. During the whole hiring process candidates cannot reveal various information, too. The new directive marks a 180-degree change on this issue.
Shifting the burden of proof and the limitation period
The new directive means a shift in the burden of proof in equal pay claims. For example – an employee takes a case to court because of the employer’s failure to apply the principle of equal pay. National legislation requires the employer to prove that there was no discrimination. The limitation period that an employee has to bring a claim for violation of any of the equal pay obligations has increased to three years. Again, this is a huge change. Just take the UK as an example, where the current time limit is six months.
Under the new directive it will be the employer’s duty to make a description of the criteria used to determine employees’ salary levels and career progression available. Not hard to guess, these criteria must be gender-neutral. This regards not only the entire hiring process, but employment, too. Looking for top talents may be much more complicated in the digital transformation period. However, it is a good idea to use new technology services to improve the situation.
Importance of the new EU directive for recruitment services in the EU and UK
The EU Directive on pay transparency is a new law that will apply to all employers in the European Union. IT recruitment and labor market will take the new law into account. The UK, after Brexit, is not required to apply this new directive. It is likely to be relevant for British employers anyway. If they have operations across Europe and want to maintain consistency in their UK and European operations, they will be forced to comply with the directive. Current UK legislation already provides for equal pay measures and imposes gender pay gap reporting obligations on companies with more than 250 employees. However, the directive goes further. Employers will have to do even more to comply with EU standards and social expectations.
Recruitment agency in Poland – how to hire specialists?
Unfortunately, the gender pay gap in the UK is one of the highest in Europe. Progress on equal pay has slowed. It is therefore possible that the British government will begin to feel increased pressure to bring British laws into line with EU regulations. It may therefore reach for the measures introduced by the directive. Employers and recruitment agencies who have already voluntarily implemented these measures will not only achieve consistency, but also be ready if and when the UK follows suit.