The EU Pay Transparency Directive came into force on 7 June 2023 and must be transposed into national law by EU Member States by 7 June 2026. The Directive aims to strengthen the right to equal pay through extensive transparency and reporting requirements, individual rights to information for employees and applicants, and easier access to evidence in disputes. Companies must introduce remuneration systems that guarantee equal pay for same work or work of equal value. Austria has not yet transposed the Directive into national law. However, employers can already take steps to prepare for the new regulations on pay transparency.
Key Changes:
- Employers will have new disclosure and information obligations towards enployees and applicants in relation to remuneration and remuneration and criteria.
- Employee representatives will have new co-determination rights in relation to pay transparency and the elimination of gender pay gaps.
- Employers must introduce internal remuneration systems to ensure equal pay for same work or work of equal value, and to comply with information and disclosure obligations. The remuneration systems are not necessarily identical to the classification under the relevant collective bargaining agreement.
- Employers with more than 100 employees will in future be subject to comprehensive reporting obligations on (adjusted and unadjusted) gender pay gaps.
- In the event of gaps of 5% or more in a category that are not objectively justified and not remedied in a timely manner, employers must carry out a joint remuneration assessment together with employee representatives and take corrective measures.
Action Steps for Employers:
- Create internal remuneration systems to ensure equal pay for same work or work of equal value.
- Incorporate new transparency requirements into recruiting and HR management processes.
- If applicable, prepare a report by mid-2027 and submit the report to employee representatives and the responsible external body.
- Observe participation rights of employee representatives and, if required, conduct joint pay assessment with employee representatives.
- To avoid a joint pay assessment altogether, companies may want to already conduct a trial run to uncover any gender pay gaps of 5% or more, assess the reasons for these gender pay gaps and take any corrective action required.
Our Services:
- Advice on legally compliant implementation in recruiting and human resources management processes and on related data protection matters.
- Advice on the creation of internal company remuneration systems.
- Support in the early identification of any gender pay gaps, their causes and advice on possible corrective measures.
- Support in discussions and negotiations with employee representatives and assistance in drafting relevant works council agreements.