Employers Face New Burden of Proof in Pay Discrimination Claims

Upcoming EU-mandated pay transparency regulations will shift the burden of proof, allowing employees to allege pay discrimination without needing to provide initial evidence if an employer fails to meet transparency standards.

Work Still Pending on Pay Transparency Reforms

While discussions regarding pay equality have quieted, the implementation deadline for Directive (EU) 2023/970 is approaching. Employers, particularly those with over 100 staff, have begun preparing to identify and report potential pay gaps, yet many smaller entities and public institutions remain passive, wrongly assuming they are exempt from these changes.

Strengthened Reverse Burden of Proof

The core of these changes involves a strengthened reverse burden of proof. Once in effect, if an employer fails to comply with transparency obligations, they must prove they acted on objective grounds even if the employee cannot initially substantiate their claim of direct or indirect discrimination. The law assumes that a lack of transparency leaves workers without the information necessary to effectively pursue claims.

Compliance is Mandatory for All Employers

These regulations apply to all employers, regardless of size or sector, as long as they employ at least two people. Employers must not only adhere to the principle of equal pay but also implement internal procedures that ensure transparency and allow them to prove their compliance during disputes.