The Pay Transparency Directive
In April 2023, the EU directive for transparency in wage setting, the so-called wage transparency directive, was adopted. It is now being investigated how the directive will be introduced in Sweden. The state investigation must report its conclusions no later than May 31, 2024, and the new rules must come into force no later than June 7, 2026.
What applies to employers?
The new rules make it mandatory for employers to inform jobseekers of the starting salary or salary scale for advertised positions, either in the vacancy notice or before the interview.
Employers will also be prohibited from asking applicants about past salaries.
What about workers?
Once employed, workers have the right to ask their employers for information on average pay levels, broken down by gender, for categories of employees performing the same or equivalent work, criteria used to determine pay and career progression, which must be objective and gender neutral.
Who are covered?
Companies with more than 250 employees will be required to report annually on the pay gap between women and men in their organization to the relevant national authority.
Smaller organizations must report every three years. Organizations with fewer than 100 employees do not have a reporting obligation.
If the report shows a wage difference of more than 5 percent that cannot be justified by objective and gender-neutral criteria, the companies will have to take measures in the form of a joint wage assessment in cooperation with the workers' representatives.
Penalties
Under the new directive, workers who have been subjected to wage discrimination on the basis of gender can receive compensation, including full compensation for lost wages and related bonuses or payment in kind.
The burden of proof in cases of wage discrimination has traditionally been placed on the employee, but now it will be up to the employers to prove that they have not violated EU rules on equal pay and transparency in wage setting. Penalties for infringements must be effective, proportionate and dissuasive and will include fines.
