European Commission Aims to Reduce Gender Pay Gap

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Brussels, 5 March 2010

European Commission Aims to Significantly Reduce the EU Gender Pay Gap

The European Commission plans to use a series of measures aimed at significantly reducing the pay gap between men and women over the next five years. The average gender pay gap in the EU currently stands at 18%. To lower this rate, the Commission plans to raise awareness among employers, encourage initiatives to promote gender equality and support the development of tools to measure the gender pay gap. On the other hand, new legal measures are not excluded. The Commission intends to consult the European social partners and analyse the impact of a number of options: strengthening sanctions, providing pay transparency and regular reporting on the pay gap. A Eurobarometer survey released today shows that more than 80% of Europeans support urgent action to address the gap.

" I am deeply concerned that the gender pay gap has barely fallen over the last 15 years and in some countries it is even increasing," said Vice-President Viviane Reding, EU Commissioner for Justice, Fundamental Rights and Citizenship. " In these times of crisis, the gender pay gap is a cost Europe cannot afford. We need to use all the tools we have to close the gender pay gap. Together with Member States, we will seek to significantly reduce the gender pay gap in the EU by the end of this Commission's mandate."

The gender pay gap – the average difference in gross hourly earnings between women and men across the economy as a whole – now stands at 18% for the EU, with considerable differences between countries and sectors. It reflects ongoing inequalities in the labour market, which in practice mainly affect women. Reducing the gap requires action on several levels to tackle its multiple causes.

In the second half of 2010, the Commission will put forward a new EU strategy for gender equality for 2010-2015. Tackling the gender pay gap will be one of the main priorities. The Commission will use all available instruments, both legislative and non-legislative, to reduce the gender pay gap.

The Commission will analyse in detail the economic and social impact of certain options, together with the European social partners, in particular:

· On reporting the gender pay gap and ensuring transparency on pay at company and individual levels or collectively through information and consultation with workers;

· On reinforcing the obligation to ensure gender neutral job classifications and pay scales;

· On improving the provisions on sanctions in case of a breach of the right to equal pay, to ensure that they are dissuasive and proportional (for instance, higher sanctions in case of repeated offence).

The Commission will also:

· Raise awareness among employees, employers and the public of the causes of the pay gap and potential solutions;

· Encourage initiatives promoting gender equality at the workplace with equality labels, charters and awards. In France, for example, the "Label égalité professionnelle" was established in 2004. Companies can obtain it for a period of three years if they follow a special procedure and show their commitment to gender equality in a range of areas including scheduling, career development and internal promotion of women in key positions.

· Support the development of tools to help employers analyse gender pay gaps within their companies. For example Germany developed software which calculates the wage gap. This instrument can help employers become aware of the situation and take measures to tackle the gender pay gap .

· Improve the supply and quality of statistics on the pay gap.

Addressing gender inequalities in the labour market also forms a key element of Europe2020 the EU's economic and employment strategy for the next decade (see IP/10/225 ). According to a study conducted under the Swedish EU Presidency in 2009, eliminating gender gaps in employment in the EU Member States could lead to a potential 15% - 45% increase in GDP.

Finally, the Commission is conducting a study on initiatives promoting gender equality in the workplace. The results of the study will be presented on 5 May.

Background

A Eurobarometer survey on gender equality shows that Europeans consider closing the gender pay gap is a top priority in tackling inequality between women and men, along with confronting violence against women. 82% of Europeans think that urgent action should be taken to tackle the gender pay gap. Meanwhile, 62% of respondents consider gender inequality to be widespread in their country. 66% also said the situation has improved over the past decade.

Thanks to EU and national legislation on equal pay, cases of direct discrimination – differences in pay between men and women doing exactly the same job – have fallen. But the pay gap goes far beyond this: it reflects ongoing discrimination and inequality in the labour market as a whole which, in practice, mainly affects women.

The effect of the gender pay gap on lifetime earnings means that women will also have lower pensions. As a result, women are more affected than men by persistent and extreme poverty: 22% of women aged 65 and over are at risk of poverty compared to 16% of men.

Awareness-raising activities are essential to inform employers, employees and stakeholders why there is still a gender pay gap and how we can reduce it. The Commission is therefore launching the second phase of an EU-wide information campaign with actions decentralised across the 27 EU Member States. A new online gender pay gap calculator will allow employees and employers to visualise the gender pay gap.