Report on the Pay Transparency Directive submitted
This week, the government received the report on the implementation of the Pay Transparency Directive. The directive aims to strengthen the principle of equal pay for women and men for equal work or work of equal value by increasing transparency in pay setting and strengthening compliance mechanisms. Read on for a summary of the proposed changes and what they mean for your business.
Summary of what the proposed changes mean for employers
1. pay structures that ensure equal pay for equal work or work of equal value and pay mapping
The inquiry notes that the current requirement for all employers to conduct an annual pay survey largely meets the directive's requirement for employers to have pay structures that ensure equal pay for equal work or work of equal value. In order to fully implement the Directive, it is proposed that the provisions on pay surveys be supplemented to require employers to include in the pay survey an analysis of the impact of parental leave and other leaves on pay.
2. transparency of the pay system
Employers must inform job applicants of the starting salary or starting salary range and the applicable collective agreement provisions before hiring.
Employers are not allowed to ask job applicants about their previous salaries.
Employers must inform employees about pay rules and practices and, on request, provide information on individual pay and average pay for equal or equivalent work, broken down by gender.
3. payroll reporting
Employers with 100 or more employees are required to submit information from the pay survey to the Discrimination Ombudsman (DO) and to carry out regular pay reporting that shows pay differences between women and men.
4. Cooperation and Information
As at present, employers must cooperate with trade union organizations in the work on the pay survey. In addition, the rules on cooperation are extended to include the formulation of criteria for job evaluation and justification of pay differentials, as well as pay reporting.
It is also proposed that employers without a collective agreement must inform all trade union organizations that have members at the workplace and have requested cooperation. Employers with a collective agreement need only inform the employee organization that is party to the collective agreement.
5. Sanctions, burden of proof and statute of limitations
Employers who break the rules may be liable to pay damages and penalties.
If an employer does not comply with its transparency obligations, the burden of proof may shift to the employer in pay discrimination cases.
The limitation period for obtaining a judicial review of pay discrimination is extended to three years from the date when the employee became aware, or should have become aware, of the circumstances that the employee claims constitute pay discrimination. This means that you, as an employer, must keep records of pay and pay-setting criteria for a longer period of time in order to be able to prove that employees have not been pay discriminated against.
Next steps
The report will now be prepared by the Government Offices for further legislative work. The implementation of the Pay Transparency Directive must be implemented in Swedish legislation by June 7, 2026.
TechSverige will provide more detailed information and advice to its member companies on employers' obligations in good time before the legislative changes come into force.
The full report can be found here: https://www.regeringen.se/rattsliga-dokument/statens-offentliga-utredningar/2024/05/sou-202440/