The EU gender pay gap stood at 13% in 2021.
Members of the European Parliament on Thursday gave their final approval to the pay transparency directive that will force some employers to disclose average salaries broken down by gender in a bid to close the gender pay gap.
"Today is a historical day. We've reached a huge milestone in Europe for women's rights, for workers rights, and for the fight against pay discrimination," Danish MEP Kira M. Peter-Hansen (Greens), one of the rapporteurs of the law, told journalists after the vote.
Under the new rules adopted by MEPs by 427 votes to 79 against and 76 abstentions, employers will now have to disclose a pay range either on job adverts or before an interview takes place. They will also be required to provide complete information on individual and average pay levels, broken down by gender, when asked by an employee.
Employers with at least 100 employees will also have to publish information on the pay gap between female and male workers every three years, with larger employers requested to do so more regularly.
If the pay gap they report is of at least 5%, employers will have to carry out a pay assessment in cooperation with workers' representatives.
"To European companies we say: show your true colours," Dutch MEP Samira Rafaela (Renew), also a rapporteur on the law, told the post-vote press conference.
"We do not allow pay secrecy anymore with this legislation because secrets are the best way to keep inequality alive. And we want people to ask and demand information and we want the information to become public. That will happen so we can hold companies accountable."
The directive also shifts the burden of proof on employers in case of a pay dispute and opens the door to compensation for workers who have suffered gender pay discrimination such as pack pay, bonuses and other payments in kind.
EU countries are meanwhile urged to establish specific penalties for infringements of the equal pay rule, including fines.
The gender pay gap in the EU stood at nearly 13% in 2021, meaning women earn, on average, 13% less per hour than men. Estonia, Austria and Germany have the highest pay gaps in the bloc with rates of 20.5%, 18.% and 17.6% respectively. Slovenia, Romania and Luxembourg (in turn 3.8%, 3.6% and -0.2%) have the lowest pay gaps.
Some of the reasons that explain the gender pay gap include the overrepresentation of women in relatively low-paying sectors including care, health and education, more time spent on unpaid work such as childcare and chores that can impact career choices, the so-called glass ceiling due to fewer women in managerial positions and pay discrimination.
Romanian MEP Dragoș Pîslaru (Renew), chair of the Employment and Social Affairs Committee, told reporters this "gap has a long-term impact on women's quality of life, increasing the risk of poverty and persistent pension pay gap that is 33% nowadays".
He called on EU countries to "thoroughly and timely implement this directive".
Member states now have to formally approve the agreement.