One of the regulations announced by the government is the elimination of the so-called wage gap in the remuneration of women and men.
Large companies are to be obliged to justify the amount of remuneration paid within 30 days upon the employee's request. In addition, employees will be able to request information about the average earnings of people of the opposite sex performing the same or similar duties.
Additionally, the government has announced that it will strengthen anti-discrimination education.
It is already worth considering what the introduction of such regulations will mean in practice for employers. It is worth noting that the regulations announced by the government are quite similar to the draft regulations presented by the European Commission.
Transparency and equality of wages in the European Union
The regulations announced by the government are similar to the draft regulations presented by the European Commission, which is to guarantee equal pay in the Member States of the European Union for women and men performing the same work. The draft focuses on two areas:
- Wage transparency, which includes:
- The obligation for the company to provide information on the amount of remuneration already at the recruiting stage,
- The right of employees to be informed about the average level of remuneration, broken down by gender, for employees performing the same job or work of equal value,
- The obligation of an employer with at least 250 employees to publish information on the pay gap between female and male employees in their companies,
- If reports show a gender wage gap of at least 5% and the employer cannot justify the difference with other factors, such employer will have to carry out a pay assessment in cooperation with employee representatives.
In addition, the draft legislation guarantees compensation for employees and introduces sanctions for employers for not complying with these guidelines.
Draft law on equal pay in the European Union (March 4, 2021)
Renumeration transparency measures:
Renumeration transparency for job applicants
Right to information on employee renumeration
Reporting on the gender pay gap
Assessment of remuneration in cooperation with employee representatives
Better access to justice for workers discriminated against in terms of renumeration:
Compensation for discriminated employees
Burden of proof rests with the employer
Sanctions, including fines to be imposed by Member States
Possibility of representation in court proceedings by equality bodies and representatives on behalf of injured workers
What is the position of women in terms of wage equality regulation in the world?
PwC Global Compass of Pay Equality summarizes the issue of legal regulations in the field of equal wages in the world
Countries with regulations relevant to this issue are marked in red, for example, Iceland, Switzerland, Sweden, Spain, Australia, some states in the USA.
Orange color shows countries where the law is generally defined or does not specify sanctions for non-compliance with women's employment and equal wage laws, such as Poland, Russia, India or China.
The countries where there are no regulations in this area are marked in yellow.
It is worth noting that in Poland we also already have some regulations in the field of equal pay for women and men with regard to certain types of entities - e.g. banks, listed companies or financial advisors and participants of the financial market.
What legal measures are currently applied to ensure equal pay?
Iceland is a country that meets and applies all legal aspects. There is a reporting obligation in all countries shown in the picture, however, selected legal measures are either not applied in a given country or required only in some cases.
Is there really a wage gap in Poland?
According to the Women in Work Index report assessing the situation of women in the labor market in OECD countries, the difference in wages between women and men in Poland does not seem to be high.
In 2019, it was 6% (and decreased by 2 pp compared to 2018). This places Poland in 5th place among all 33 OECD countries. Luxembourg comes first (1%), Greece comes second (4%) and Belgium third (5%).
On average, in the OECD, the percentage difference in the average wage of women and men in 2019 was 15% (the same as in 2018).
Unfortunately, the pandemic has generally worsened the situation of women in the labor market, which may result in the widening of wage gap. If we additionally look at data from other sources, showing the so-called adjusted wage gap, i.e. the difference in remuneration of people performing the same job, of similar age and education, according to Eurostat, it reaches 16-17%, and according to GUS data - even 20%. So, in reality, the situation of women in the Polish labor market is not that good.
How does the introduction and compliance with legal requirements affect the effective equality of wages?
Countries with legal requirements for equal pay are faster to improve overall gender equality. Below we present the average results of countries in terms of gender equality and their improvement over the decade (according to the WEF GGG report).
Regulations are not everything
Employers should not wait until they are forced to guarantee equal pay to women and men by government regulations.
Rather, they should stay ahead of the regulations and set trends, especially as guaranteeing women and men equal pay for equal work has a number of benefits:
As an important element of employer branding, building the company's image and brand on the labor market, building social trust and attracting and retaining talents; higher levels of employee satisfaction and retention, greater diversity and the development of a culture of employee inclusion, - companies should address the issue also when competing for employees;
May have an impact on higher profitability and potentially higher customer expenses, which translates into improved business results;
It is one of the elements allowing to gain social recognition for actions in socially significant matters.
Why is it worth getting interested in the topic of equal pay?
Employer brand enhancement
Increase in employee satisfaction
Impact on reputation in the area important to management
Positive influence on the financial results of the Company
Influencing the diversity in the Company and building a culture of openness
Increase in employee references
Increasing efficiency
Reduction of risks related to labor disputes on the grounds of wage inequality
Recognition of the company in a socially significant area
What employers should do now to prepare for the upcoming regulations?
It is worth considering whether:
your organization is aware of the issue of equal pay and upcoming regulations,
the organizational culture is built on the principle of equal pay for the same work,
pay systems are reviewed for equal pay,
the company has a policy to support equal pay,
perhaps this is the moment when it is worth to undergo certification that confirms that we guarantee our employees equal wages?
As PwC, we have already carried out many analyzes and reviews of equal pay issues in organizations. We then conducted many of them through the certification process, together with the Swiss Equal Salary foundation. If you have any questions, we are open to conversation.
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