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New EU Regulations to Increase Pay Transparency and Close Gender Pay Gap

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Last week, the Council of the European Union announced regulations that should lead to more transparency about pay differences between men and women. The rules are part of a law recently passed by the European Parliament. Employees will soon be able to see what their colleagues earn on average. And companies with more than a hundred employees must periodically report on their pay gap policy.

It may take another three years before this law is transposed into national law in the Netherlands.

Some companies are already making efforts to reduce the pay gap, but there will be a legal obligation.

Subconscious

Cécile Wansink of the interest group Women Inc. welcomes the arrival of the law. She says the pay gap is partly caused by the fact that women are less likely to hold managerial positions and work in sectors with lower wages.

But there is also a part that is more difficult to explain. For example, men who do the same work as women often get paid better. This could be because, for example, women are valued differently than men. “Men are more often judged on potency, while women are judged on what they can already do,” says Wansink.

Another problem is that women who want to negotiate their salary are met with incomprehension, says Jaap van Muijen, professor of psychology at Nyenrode. “It used to be said that women should negotiate more, just like men. But if they do, it is seen rather negatively: what a bitch.”

The new law should help narrow the pay gap between men and women in the same position, says Wansink. “If an employer unknowingly allocates a lower salary, you will soon be able to see this much more clearly as a woman. Large companies should also make an analysis of the causes of the pay gap. This can also lead to more women getting a leadership position.”

Broader policy

Some companies are already doing something about the wage differences. For example, asset manager Van Lanschot Kempen reduced the difference in pay between men and women from 4 to 2.7 percent in one year.

Randstad says after its own investigation that the wage difference does not play a role there. Both companies say that the remuneration policy is part of a broader diversity policy, with, for example, women-friendly terms of employment and gender-neutral job descriptions.

Pretty exciting

For other companies, the law is a big but good step, says HR expert Kim van de Kasteele. “They have to think about new policies and that’s not something you develop in an hour. It’s also about cultural change,” she says.

“You will soon have to be able to explain why one earns more than the other, and that is still lacking in many SMEs,” says Van de Kasteele. Keeping this kind of administration and straightening out wage differences can cost time and money, she says.

But the administrative burden can also be a challenge for larger companies, says Eefje Brul, policy advisor at AWVN. “Especially for employers, who have a lot of staff and a high turnover, this can be quite a job.”

Employers find transparency about wages difficult, notes Van de Kasteele. “Because they feel they cannot reward staff individually. In turn, I would say that it provides clarity.” Brull agrees. “An employee will soon be allowed to ask how others are rewarded. That can be quite exciting, even if the employer thinks that it rewards in a good way,” she says.

2023-05-01 06:44:10


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