Exclusively for subscribers: Growing pension systems become a liability risk under the EU Pay Transparency Directive. The Freshfields experts Dr. Thomas Granetzny and Leander Rathmann explain which assessment methods are gaining ground – and why you need to act now.
Since its adoption in June 2023, the EU Pay Transparency Directive (2023/970) has employed HR managers and legal advisors alike. Among other things, the directive obliges employers to provide applicants with information about their starting salary before they are hired, to provide existing employees with information about their own remuneration and the remuneration of comparable colleagues upon request and – for companies with 100 employees or more – to publish regular pay reports in order to make any pay gaps between the genders transparent. There are also extensive requirements for the documentation and justification of remuneration structures.
The requirements are extensive and there are numerous open questions. Many companies have set up their own project teams to structure and implement the guidelines’ requirements. Some questions could be clarified relatively quickly. However, this does not include the company pension scheme (bAV), which shows little compliance with the requirements of pay transparency.
