Starting from June 5th, 2023, the European Parliament and the Council's Directive no. 2023/970 will come into effect. This directive aims to enhance the implementation of the principle of equal pay for equal work or work of equal value between men and women. It focuses on introducing pay transparency measures and enforcement mechanisms.

This Directive aims to combat the pay gap between men and women and to make payment issues transparent by making it compulsory for employers to inform potential or current employees about pay criteria, pay rise prospects, etc.

Thus, the Directive will require employers to inform candidates undergoing the recruitment process about:

• the initial salary level or range, based on objective, gender-neutral criteria, to be awarded for the post in question; 
• where applicable, the relevant clauses of the collective employment agreement applied by the employer in relation to the post.

As regards the transparency of labour relations, the most important measures provided by the Directive are:

1. The regulation in favour of employees of the right to receive annually information on individual wage levels, average levels, broken down by gender, categories of workers doing the same work or work of the same value, and the obligation of employers to provide this information;
2. The prohibition of contractual clauses that limit the ability of workers to disclose information about their pay. This means that employers will not be able to enter into confidentiality agreements with employees that would cover pay information.
3. The obligation of employers to communicate the following data to the competent authorities:

a) the gender pay gap;

b) the pay gap between women and men existing at the level of complementary or variable components;

c) the median gender pay gap;

d) the median gender pay gap existing in the complementary or variable components;

e) the proportion of female and male workers benefiting from complementary or variable components;

f) the proportion of female to male workers in each quartile pay band;

g) the gender pay gap by category of worker, broken down by the usual basic wage or salary and the complementary or variable components.

The deadline for reporting the data listed above is different depending on the number of employees that the employers have. 

Therefore, 

• employers with at least 250 employees have to report until 07.06.2027 and every year thereafter, 
• employers with 150-249 employees have to report until 07.06.2027 and every three years thereafter, 
• employers with 100-149 employees have to report until 07.06.2031 and every three years thereafter. 

For employers with less than 100 employees, the Directive does not impose a reporting obligation, but allows them to report on a voluntary basis. However, the Directive leaves it up to Member States to regulate an obligation for employers with less than 100 employees to report. 

It remains to be seen whether Romania will adopt such a measure and which authority will be chosen as competent to receive this data.

Author: Attorney at law, Ana Maria Nistor, Law Office Grecu & Partners.

- This is native content with Labour Law info by Grecu Partners.