The EU directive, a significant step towards gender pay equality, mandates that companies must implement measures to close the Gender Pay Gap by June 2026.
With the advent of ‘pay parity,’ a term that signifies equal pay for equal work, the recruitment landscape and companies’ pay cultures could transform from June 2026.
Wage parity, a principle that underpins fairness and equality, is not just a passing trend; it is set to become the cornerstone of future work cultures. The EU’s directive, known as the Gender Pay Gap, is a crucial step in addressing the issue of unequal pay.
The directive was about time. We all know and have experienced that women tend to earn less than their male counterparts for the same work.
This is not just a personal observation but a fact borne out by Eurostat data, which show that women in Europe earn, on average, 12.7% less per hour than men. In some European countries, such as Hungary, the pay gap is even higher, at 17.3%.
Under the new rules, which will come into force in a year and a half, companies will be allowed to give up to a 5 percent pay differential for work of equal or equal value.
Companies must establish pay scales that ensure fair and transparent pay for all employees. The legislation encourages companies to base their pay policies on gender-neutral criteria such as productivity, experience, or responsibilities.
If we consider that in recent years, women have been paid less for the same work, this fact alone is “discriminatory”. Closing the gender pay gap is a matter of fairness and equality. It ensures that women get equal pay for equal work, a fundamental right.
In addition, I believe that the legislation has many other benefits:
- Closing the gender pay gap can boost the economy. If women earn more, they have more purchasing power, stimulating economic activity and increasing the tax base.
- Higher incomes for women can help reduce poverty, especially in single-parent households, which women often head.
- Gender equality in the workplace can lead to higher productivity. Diverse teams bring different perspectives and ideas, enhancing problem-solving and innovation.
- Women are more likely to participate in the labour market and hold higher-level positions if they are fairly remunerated.
- Policies to reduce the gender pay gap often include improving work-life balance, such as better parental leave and childcare support. This benefits both men and women.
Addressing the gender pay gap contributes to a fairer and more prosperous society.
