Legal Update

The EU Pay Transparency Directive at a glance

Legal Update | 20 March 2024

EMPLOYMENT LAW

Some of the main rules that the Member States shall be required to implement in time for the Directive transposition date of mid-2026 have to do with pay transparency prior to employment, transparency of pay setting and the employees' right to information.

The EU Pay Transparency Directive - At a glance

Pay transparency prior to employment

The national legislation that shall transpose the Pay Transparency Directive must ensure that the applicants for employment have the right to receive, from the prospective employer, information about:

1. the initial pay or its range, based on objective gender-neutral criteria, to be attributed for the position concerned; and
2. where applicable, the relevant provisions of the collective agreement applied by the employer in relation to the position.

Such information shall be provided in a manner such as to ensure an informed and transparent negotiation on pay, such as in a published job vacancy notice, prior to the job interview or otherwise.

Moreover, the employer shall not be allowed to ask the applicants about their pay history during their current or previous employment relationships.

Employers shall ensure that job vacancy notices and job titles are gender-neutral and that recruitment processes are led in a non-discriminatory manner, in order not to undermine the right to equal pay for equal work or work of equal value (the 'right to equal pay').

Transparency of pay setting and pay progression policy

Employers shall be required to make easily accessible to their workers the objective and gender-neutral criteria that are used to determine workers' pay, pay level and progression.

Right to information

Workers shall have the right to request (either personally or through workers' representatives or through an equality body) and receive in writing information on their individual pay level and the average pay levels, broken down by sex, for categories of workers performing the same work as them or work of equal value to theirs.

Employers shall inform all workers, on an annual basis, of their right to receive this information and of the steps that the worker is to undertake to exercise that right.

Among other novelty rules, the Pay Transparency Directive shall bring about a significant change to the Romanian employment law as workers shall not be prevented from disclosing their pay - for the purpose of the enforcement of the principle of equal pay. Member States shall effectively be required to put in place measures to prohibit contractual terms that restrict workers from disclosing information about their pay.

Employers may, nevertheless, require workers who have obtained information in this context, other than information concerning their own pay or pay level, not to use that information for any purpose other than to exercise their right to equal pay.

Currently, article 163 (1) of the Romanian Labour Code stipulates that the salary is confidential and that the employer is required to take all necessary measures to preserve this status. The only exception to this rule is the one provided in section (2) of this legal article, whereby the confidentiality of the salaries cannot be opposed to the trade unions or to the employees' representatives in connection with promoting the interests and defending the rights of the employees, in their direct relationship with the employer.

Accessibility of information

Employers shall provide any information shared with workers or applicants for employment pursuant to these provisions in the Directive in a format which is accessible to persons with disabilities and which takes into account their particular needs.

This document is intended for informational purposes only, does not represent legal advice and does not focus on particular cases.

For further information or analysis on specific matters, please contact Ioana Cazacu.