Building Fair and Transparent Pay Systems

How must employers make pay decisions?
Pay structures must be based on objective, gender-neutral criteria. These can include skills, effort, responsibility and working conditions, as well as relevant factors such as education, training and experience.

Different factors may carry different weight depending on the role. However, employers must apply the criteria consistently and be able to explain why a pay difference is justified.

What is work of equal value?
Equal pay is not limited to workers performing identical jobs. Roles with different titles, tasks or reporting lines may still be comparable where they require similar levels of skill, effort, experience and responsibility, or involve comparable working conditions.

This prevents employers from relying on job titles or organisational structures to conceal comparable work.

Who can be used as a comparator?
A comparator helps determine whether workers performing the same work or work of equal value are treated differently.

The comparator may work for the same employer or establishment. Comparisons can also extend across establishments or companies where one body sets the relevant pay conditions and has the power to correct any inequality.

That body might be a parent company, government ministry, municipal authority or group-wide HR function.

What happens where no opposite-sex comparator exists?
The absence of an opposite-sex colleague does not automatically prevent an equal-pay claim.

A worker may rely on a hypothetical comparator, statistics or other available evidence. A hypothetical comparator considers how a worker of another sex would have been treated in the same situation.

What must employers report?
Employers within the reporting thresholds must disclose average and median gender pay gaps, including separate figures for variable or complementary pay.

They must also report the proportion of women and men receiving variable pay, their distribution across pay quartiles and pay gaps within individual worker categories.

Variable pay is considered separately because bonuses, commission, equity, benefits and overtime can reveal inequalities that basic salary figures may conceal.

When do reporting obligations begin?
Employers with at least 250 workers must report by 7 June 2027 and then annually. Employers with 150–249 workers report from the same date and then every three years.

Employers with 100–149 workers begin reporting by 7 June 2031 and then every three years. Reporting is voluntary below 100 workers unless national legislation makes it mandatory.

What is a Joint Pay Assessment?
A Joint Pay Assessment is a formal review conducted by an employer with workers’ representatives to identify, explain and correct unjustified gender pay gaps.

It is required where reporting reveals an average pay gap of at least 5% within a worker category, the employer cannot justify it using objective, gender-neutral criteria, and the gap is not remedied within six months.

The 5% threshold triggers further investigation. It does not, by itself, prove discrimination.