Despite the fact that principles such as equal pay for equal work have been enshrined in law for years, and gender discrimination is also prohibited by law, in practice there is a pay gap[1]. This gap is often invisible due to a lack of transparency.
The Pay Transparency Directive therefore introduces five new requirements that will affect companies’ pay policies:
- Equal pay for equal work: Employees must use gender-neutral and clear job classifications
- Transparency in setting pay: Easy access must be provided to the objective and gender-neutral criteria used to determine pay, pay levels and pay progression
- Pay transparency in job ads: Applicants must be told about the pay range for a position during the recruitment process
- Pay transparency by category: Employees’ right to access information about their individual remuneration and the average remuneration within their job category
- Pay gap reporting: Requirement to draw up a detailed report on pay gaps. If the gap exceeds 5%, an action plan must be developed
Companies face far-reaching changes to the way they design and communicate about their remuneration policy.
Active brainstorming is already taking place on how to identify pay gaps within the company using objective data and statistics in order to resolve them as quickly as possible.
[1] Adjusted for working hours, the pay gap in Belgium is 7.0%. The unadjusted gap is 19.5%. These figures are based on NSSO data and were calculated using the most comprehensive figures available on women’s and men’s pay and employment in Belgium in 2023 (source: Institute for Equality between Men and Women).
Bear in mind that the principle of equal remuneration applies to pay and all other benefits, whether in cash or in kind, that employees receive directly or indirectly from their employer in connection with their employment. Any supplementary or variable components of remuneration that employees receive in addition to their regular base salary should also be included.
Bonus and supplementary pension plans and other insured benefits must therefore be taken into account too, so be sure to examine these benefits.
Many companies are currently focussing on gender-neutral job classification, but be aware that any changes to job classification or pay could also affect supplementary pension plans.
We are continuously monitoring the legislation and will bring this subject to your attention again once we have more clarity on how Belgium is incorporating this directive into its legislative framework.
