Closing the gender pay gap: Can the EU mandate equality?

The directive, which became mandatory for all member states on June 7, fundamentally shifts how companies handle compensation. Employers must now disclose pay ranges for all job vacancies and are strictly prohibited from asking candidates about their salary history to prevent the cycle of past pay discrimination. Once hired, employees gain the right to request average pay levels for their role, broken down by gender, and can demand clarity on the objective, non-discriminatory criteria used to set those figures.

Should an unexplained pay gap of five percent or more emerge between genders, companies have six months to rectify the disparity or face financial penalties. While Belgium and Luxembourg currently report the smallest gaps in the EU, progress remains uneven across the continent. Italy, Slovakia, and Lithuania have recently enacted local legislation, while other nations are still finalizing their legal frameworks. Economist Natalia Arias Pérez cautions that while transparency is a vital step, it is not a panacea. Eliminating the gap requires broader structural change, specifically addressing the prevalence of involuntary part-time work, the "motherhood penalty," and the systemic barriers that keep women from accessing higher-paying sectors.