Women in the European Union earned, on average, 12% less than their male counterparts in 2023, according to data from Eurostat. As the EU moves toward addressing this pay disparity, its Pay Transparency Directive — requiring member states to incorporate measures by June 2026 — aims to bridge the gender pay gap by increasing transparency in pay practices across companies.
However, opposition is growing from business groups, who are urging for exemptions from specific provisions. They advocate for excluding companies with 100 to 250 employees from the transparency requirements, limiting these provisions to smaller businesses with fewer than 50 workers.
The European Trade Union Confederation (ETUC) has warned that blocking transparency could cost EU women at least €4.8 billion annually, potentially rising to €7.2 billion. This loss would translate to an average of €465 to €700 per woman each year.
Transparency Advocates Stress Benefits for Women Workers
Despite efforts to improve the situation, salary transparency in job postings remains notably low, particularly in some of Europe’s largest economies. For instance, Germany’s transparency rate is below 20%, according to hiring platform Indeed.
Isabelle Schömann, Deputy General Secretary of ETUC, stressed the importance of stronger measures in the European Commission’s upcoming Roadmap for Women’s Rights. “Equality thrives on transparency. The more we can shine a light on discrimination, the more we can force action to address its injustice,” she said.
The ETUC estimates that companies with between 100 and 250 employees, potentially exempt from transparency rules, employ more than 10 million women across Europe. Schömann argued that businesses’ claims of being overburdened by regulation fail to acknowledge the overburdening experienced by women workers due to low pay.
Cost of Inaction: Financial Impact on Women in SMEs
The ETUC calculated that if pay transparency requirements led to a 15% reduction in the gender pay gap, women working in companies with 100 to 249 employees could see an average increase of €700 annually. This would total an estimated €7.2 billion in gains for women across these businesses. In a more conservative scenario, a 10% reduction would result in an average increase of €465 per woman, adding up to a potential €4.8 billion loss if these workers are excluded from transparency provisions.
BusinessEurope Calls for Exemptions
BusinessEurope, a lobby group representing European businesses, has called for exemptions from gender pay gap reporting obligations for most companies covered by the Pay Transparency Directive. In a report titled Reducing Regulatory Burden to Restore the EU’s Competitive Edge, the group proposed that SMEs with fewer than 250 employees be excluded from the directive’s reporting requirements.
While BusinessEurope supports efforts to reduce the gender pay gap, it has argued that the pay transparency directive imposes excessive reporting obligations that are burdensome and unnecessary. “It is a very clear case of necessary simplification,” the organization told Euronews Business.
Significant Disparities in Salary Transparency Across Europe
Salary transparency rates vary significantly across Europe. As of 2024, the UK leads with 70% of job postings including salary information, followed by France at 51%. Transparency in the Netherlands and Ireland stands between 40% and 45%. However, Germany and Italy lag behind with rates under 20%.
Lisa Feist, an economist at Indeed Hiring Lab, attributed these differences to varying labor market characteristics, sectoral compositions, and cultural factors. “There is a stark contrast in salary transparency across Europe,” Feist said, noting that differing levels of comfort with discussing salaries contribute to the varying levels of transparency in each country.
The Role of Transparency in Supporting Women and Marginalized Groups
Feist emphasized the crucial role of salary transparency in closing the gender pay gap, particularly for women and marginalized groups who often face greater barriers in salary negotiations. “Providing salary information upfront strengthens their position in pay negotiations and promotes fairer outcomes,” she explained.
Salary transparency, however, tends to be lower in high-paying industries. Indeed’s data revealed that high-wage job categories, such as industrial engineering, software development, and law, exhibited the least transparency, while lower-wage sectors, including cleaning, sanitation, and food services, had higher rates of transparency.
For example, in France, salary transparency in low-wage jobs was 68%, compared to just 39% in high-wage roles. In Ireland, transparency rates were 57% in low-wage sectors, dropping to 18% in high-wage industries.
As the EU moves closer to enforcing its Pay Transparency Directive, the debate continues over how best to balance regulatory burdens with efforts to close the gender pay gap. The outcome of this discussion could significantly impact the financial well-being of millions of women across Europe.
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