UK, France, and Germany Advance Wage Information Disclosure... Focus on Closing the Gender Pay Gap [New Administration Policy Issue]

Europe Pushes for Wage Information Disclosure Led by the EU
Mandatory Disclosure to Address Gender Pay Gap
France Applies System to Workplaces with 50 or More Employees
Australia Expands Disclosure Obligation from Industry to Company Level

As the new administration is pushing for the implementation of the wage distribution system, it is drawing attention that various countries, especially in Europe, have adopted different systems for disclosing wage information. Countries such as France, Germany, Australia, and the United Kingdom have developed related systems over several years as part of efforts to reduce the gender pay gap. Some countries have gone beyond merely disclosing wage gaps and have moved to the stage of specifying measures for improvement.

Yonhap News

In Europe, efforts to disclose wage information have not been limited to individual countries; continuous initiatives at the European Union (EU) level have fostered an environment of expanding wage information disclosure. For example, in 2023, the EU announced the Wage Transparency Directive. This directive requires companies with 250 or more employees to report wage information, and if the gender pay gap exceeds 5%, companies must not only conduct a wage assessment but also establish measures to address the gender gap. The EU has led to the swift implementation of the system by requiring each member state government to revise its domestic laws based on this directive within three years.

By country, France operates the “Gender Equality Index Disclosure System.” This system mandates companies with 50 or more regular employees to publicly disclose the gender pay gap index among their employees. Each company must post the results of the previous year’s index on its website by March 1 every year and submit related information to the company’s Social and Economic Committee (the employee representative body) and labor inspectors. On the government-run Gender Equality Index website, the total annual gender equality index score and the ratio of female executives at each company are made public.

In Germany, under domestic law, employers at workplaces with 500 or more employees who prepare management reports must attach a gender equality and equal pay report as an appendix to the management report. Employers covered by collective agreements are required to prepare and publish this report every five years, while those not covered must do so every three years. However, since there is no legal binding force for preparing these reports, authorities are seeking ways to clearly define the reporting obligations and content requirements.

Sweden implements a corporate wage audit system. Based on the Anti-Discrimination Act, this system requires all workplaces with 10 or more employees to identify, correct, and prevent unjustified gender-based wage differences. The system involves detailed analysis of the work performed by male and female employees, examining not only pay differences between men and women in female-dominated and other occupations but also the pay gap between men and women performing work of equal value. Workplaces subject to this system must document and retain the results of these audits.

In 2023, Australia increased specificity by enacting legislation that breaks down gender pay gap disclosures, previously published by industry, to the company level. The main provision mandates companies with 100 or more employees to publicly disclose gender equality indicators, such as workforce and board/executive gender composition and equal pay between men and women. Furthermore, companies with 500 or more employees are required not only to disclose these indicators but also to establish policies or strategies for each indicator to ensure compliance with gender equality standards.

In 2017, the United Kingdom established a legal foundation requiring all private and public sector organizations with 250 or more regular employees to disclose gender pay gap information annually. For private sector employers, including private companies and non-profit organizations, gender pay gap information calculated as of April 5 each year must be disclosed by April 4 of the following year. Disclosure items are diverse, including the average and median hourly wage differences between male and female employees receiving full pay, as well as the average bonus differences paid to male and female employees.