In order to reinforce the application of the principle of equal pay for men and women for equal work and non-discrimination in pay, Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023 to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms was adopted and entered into force on 6 June 2023. EU Member States are required to implement the Directive into national law by 7 June 2026.
While the principle of equal pay for men and women for equal work is already enshrined in Article 157 of the Treaty on the Functioning of the European Union and the prohibition of discrimination in Article 4 of Directive 2006/54/EC of the European Parliament and of the Council, the lack of transparency in pay effectively prevents victims from applying these principles. The European Parliament and the Council (EU) 2023/970 thus aim, in particular, to strengthen the transparency of the gender pay system, to empower workers to assert their right to equal pay, and to strengthen the enforcement of equal pay rights and obligations for men and women.
Transparency of remuneration
Prospective employers will be obliged to inform job applicants of the initial salary/wage or remuneration range for advertised positions based on objective, gender-neutral criteria or the provisions of the collective agreement that the employer applies in relation to the position, e.g., in the published vacancy notice or before the job interview. Furthermore, prospective employers will not be allowed to ask applicants about their remuneration history in the context of existing or previous employment relationships.
Employers will also be required to provide existing workers with easy access to the criteria used to determine remuneration, remuneration levels and progression, which must be objective and gender neutral. Workers will also have the right to request from their employers written information on their individual level of remuneration and on the average levels of remuneration broken down by gender for categories of workers who perform the same work or work of equal value as them.
Employees must also not be prevented from disclosing information on their remuneration for the purposes of enforcing the principle of equal pay, and Member States will be obliged in particular to adopt measures prohibiting contractual terms which prevent workers from disclosing such information.
Pay gap reports
Member States are obliged to ensure that employers with 250 or more employees provide the designated national monitoring body with information, relating to their organization, on the gender pay gap according to specified criteria by 7 June 2027, and annually thereafter. Employers with between 150 and 249 employees will be required to provide this information by 7 June 2027, and every 3 years thereafter. Employers with 100 to 149 employees will be required to provide this information by 7 June 2031, and every 3 years thereafter. Member States may also require employers with less than 100 employees to provide this information.
If the reports show an average gender pay gap of at least 5% in any category of employees, which the employer does not justify on objective and gender-neutral criteria, and the employer does not remedy the gap within 6 months of the date of submission of the pay report, employers will be required to conduct a joint pay review in cooperation with employees’ representatives.
Right to compensation
Member States shall further ensure that any worker who has suffered damage as a result of a breach of any of the rights or obligations relating to the principle of equal pay shall have the right to claim and obtain full compensation for that damage or compensation intended to put the worker who has suffered damage in the same position as he/she would have been in had he/she not been discriminated against on grounds of sex or had there been no breach of any of the rights or obligations relating to the principle of equal pay.
Compensation is to include full reimbursement of unpaid remuneration and related bonuses or benefits in kind, compensation for lost opportunities, non-pecuniary damage, any damage caused by other relevant factors, as well as interest for late payment.
Reversal of the burden of proof and access to evidence
Member States are also obliged to ensure that where employees feel aggrieved by non-compliance with the principle of equal pay and bring the matter before the competent authority or a national court, the employer, as the defendant, will now bear the burden of proof and thus will be required to prove that there has been no discrimination in pay.
Member States shall ensure that in proceedings relating to equal pay claims, the competent authorities or national courts may, in accordance with national law and practice, order the defendant to disclose all relevant evidence in its possession, including confidential information if it is considered relevant to the equal pay claim.
Same remuneration for the public contracts and concessions
Furthermore, Member States shall take appropriate measures to ensure that economic operators comply with their obligations under the principle of equal remuneration when performing public contracts or concessions.
Member States shall consider whether to require contracting authorities, where appropriate, to introduce penalties and to lay down conditions for the termination of contracts to ensure compliance with the principle of equal remuneration in the performance of public contracts and concessions. As a last resort, contracting authorities could exclude the relevant economic operator from participating in the procurement procedure or Member States could require them to do so.
Legislative work in the Czech Republic
According to the Government’s legislative work plan for 2024, the Minister of Labour and Social Affairs is expected to submit the relevant amendment to the Labour Code to the Government in May 2024, with planned effect from January 2025.
