More than 60 years ago, the EU introduced the principle of equal pay for equal work for men and women. Yet, a gender pay gap—the difference between the average gross hourly earnings of female and male employees—persists in most countries. In some EU member states, it has been found that the gap even widened in recent years as a result of the 2008 financial crisis.

One proposed solution to address the gender pay gap is pay transparency, and in 2014, a European Commission (EC) Recommendation (PDF) encouraged member states to implement measures to aid pay transparency. These include: the right to request information on pay levels; issuing gender pay reports; conducting gender pay audits; and discussing the issue of equal pay during collective bargaining.

Implementation has been limited, however. The EC therefore plans to propose binding pay-transparency measures in 2020. In light of this, RAND Europe was asked to analyse the existing evidence around binding pay-transparency measures, assess their pros and cons, and identify the factors that can hinder or promote success.

The analysis found that arguments for pay transparency measures include their potential to help identify and address unjustified or discriminatory pay gaps. Availability of information on pay can enable employees and/or their representatives to take legal action and demand equal pay. Similarly, pay transparency can support employers to review pay at their organisation and take steps to remedy any apparent discrepancies.

It is hoped that this year's planned legislative proposal for binding pay-transparency measures by the EC, as part of a new European Gender Strategy, will help support implementation, and accordingly make progress towards ensuring equal pay for equal work. However, to ensure success and achieve the greatest impact, sufficient support should be given to both employers and employees.

Read the full article about pay transparency by Michaela Bruckmayer at RAND Corporation.