1. INTRODUCTION Purpose and scope of the evaluation 2. BACKGROUND TO THE INITIATIVE 2.1. Description of the initiative 2.2. Baseline 3. PROCESS, METHODOLOGY AND LIMITATIONS 4. IMPLEMENTATION AND STATE OF PLAY 5. ANALYSIS AND ANSWERS TO THE EVALUATION QUESTIONS 5.1. Effectiveness 5.1.1. Implementation of the concepts of ‘equal pay’, ‘same work’ and ‘work of equal value’ in national legislation and practice 5.1.2. Effectiveness of EU action in terms of for access to justice 5.1.3. Effectiveness of actions in terms of monitoring and enforcement 5.1.4. Effectiveness of actions to tackle occupational segregation 5.1.5. Effectiveness of the Recommendation 5.1.6. Effectiveness in terms of the results and impacts achieved 5.2. Efficiency 5.3. Relevance 5.3.1 Relevance to original needs 5.3.2. Relevance to current needs

5.4. Coherence 5.4.1 Internal coherence 5.4.2. Coherence with other EU interventions related to the objective of reducing gender discrimination and contributing to gender equality 5.4.3 External coherence with wider EU policies 5.4.4. External coherence with international obligations and standards 5.5. EU Added Value 6. CONCLUSIONS ANNEXES Annex 1 - Procedural information concerning the process to prepare the evaluation Annex 2 - Synthesis of stakeholders consultation activities Annex 3 – Methodological issues on the gender pay gap indicator and its decomposition using the Structure of Earnings Survey microdata Annex 4 - Intervention logic Annex 6 – Provisions within the scope of the evaluation Annex 7 – Relevant CJEU case-law Annex 8 – Concept and measurement of gender pay discrimination



ACRONYMS AND ABBREVIATIONS CEDAW Convention on the Elimination of all forms of Discrimination Against Women CJEU Court of Justice of the European Union DG JUST Directorate-General for Justice and Consumers EIGE European Institute for Gender Equality EMCO EQUINET Employment Committee European Network of Equality Bodies ETUC European Trade Union Confederation EU European Union EU Charter Charter of Fundamental Rights of the European Union GDP Gross Domestic Product GDPR General Data Protection Regulation GPG Gender Pay Gap ICCPR International Covenant on Civil and Political Rights ICESCR International Covenant on Economic, Social and Cultural Rights ILO International Labour Organisation NGOs Non-governmental organisations OECD Organisation for Economic Cooperation and Development PC Public consultation conducted by DG JUST RSB Regulatory Scrutiny Board SDG Sustainable Development Goal SMEs Small and medium-sized enterprises TEU Treaty on European Union TFEU Treaty on the Functioning of the European Union

1.INTRODUCTION

Purpose and scope of the evaluation Equal pay for equal work or work of equal value is one of the European Union’s founding principles. The principle of equal pay between women and men has been enshrined in the Treaties since 1957 (Article 157(1-2)). Article 4 of Directive 2006/54/EC implements the principle of equal pay by providing that, for the same work or for work of equal value, direct and indirect discrimination on the grounds of sex is prohibited in all aspects and conditions of remuneration. This principle, above all, reflects a human rights issue that recognises that male and female workers have equal individual dignity, but it is also an economic issue that benefits overall potential for production through more effective use of skills. However, the effective implementation and enforcement of this principle remains a big challenge, partially reflected in the persistence and magnitude of the gender pay gap (GPG) of 15.7% for the EU28 in 2018. One of the five main priorities of the 2016-2019 strategic engagement for gender equality is to reduce pay, earnings and pension gaps between women and men, thereby addressing higher risk of poverty among women. The gender pay gap in unadjusted form is also one of the three indicators for gender equality included in the social scoreboard that the Commission uses to monitor the implementation of the European Pillar of Social Rights. Gender equality has also been a prominent topic within the European Semester with the gender pay gap addressed in the Country Specific Recommendations for a number of countries as recitals and as specific recommendation in Estonia. This staff working document (SWD) provides the results of the REFIT evaluation of relevant provisions (see Annex 6) in EU law implementing the Treaty principle on ‘equal pay for equal work or work of equal value’ (TFEU Article 157 (1-2)). These are Directive 2006/54/EC, complemented by the Pay Transparency Recommendation. In the remainder of this document, Directive 2006/54/EC is referred to as ‘the Directive’ while the Pay Transparency Recommendation is referred to as ‘the Recommendation’. The two elements are jointly referred to as ‘the EU action’. The evaluation’s scope is limited to analysing the relevant provisions of Directive 2006/54/EC with a view to improving implementation of the equal pay principle, its enforcement and protection of victims of discrimination, taking into account other existing legal provisions (Art. 157 TFEU, having a direct horizontal effect) and the non-binding 2014 Pay Transparency Recommendation and their impact. This scope allows the evaluation to focus on the implementation of the legal provisions related to protecting the victims of pay discrimination and the related pay transparency measures. Given the lack of robust quantitative indicators of pay discrimination, this evaluation looks at the changes to the gender pay gap, as a broad context indicator on pay differences and relies on qualitative sources to illustrate the impact of the relevant legislative measures. The Commission’s action plan for 2017-2019 provides that the Commission will assess the opportunity for targeted amendments to the Directive with the aim, in particular, of improving pay transparency. Gender-focused commentary and the discourse on gender rights following the #MeToo movement have indirectly fuelled demands for better pay transparency. Several countries, such as Germany, France, Portugal and Ireland, have recently introduced new measures on pay transparency. Gender equality issues became more prominent internationally and the attention given to women’s rights in the public sphere clearly increased policy action to tackle gender equality issues. A 2013 report on implementing the Directive and a 2017 report on implementing the Recommendation highlight persistent problems with the practical enforcement and legal interpretation of the principle of equal pay for equal work or work of equal value. These problems are confirmed by cases brought before the Court of Justice of the European Union (CJEU) and by cases reported by the equality bodies responsible for enforcing the Directive. In line with the Better Regulation Guidelines, this evaluation assesses the effectiveness, efficiency, relevance, coherence and EU added value of the EU’s legal provisions on equal pay. In particular, this evaluation analyses: ·the relevant provisions of the Treaty (Article 157 (1-2)), which has direct effect; ·the Directive and its enforcement; ·the relevant provisions of the Recommendation and its follow-up in Member States. The evaluation also assesses: ·the ways in which the existing legal provisions on equal pay have worked in practice; ·the approaches implemented in the Member States; ·the extent to which their initial goals have been reached; ·how effectively they have been enforced; and ·their overall impact against the overall trend of the gender pay gap. The evaluation examines different aspects of the impact of the EU action on national legislation and its consequences for different stakeholders (e.g. equality bodies, employers, social partners, female and male employees and victims of sex-based pay discrimination). The evaluation also assesses any potential unnecessary or disproportionate burden or complexity. The evaluation covers the period from the adoption of the Directive in 2006 to December 2017, with some references to the more recent years when relevant and possible. It focuses in particular on how the Directive has been applied and enforced since 2014, when the Recommendation was adopted. This SWD also tries to take account of developments that have taken place in Member States between the end of the evaluation period (December 2017) and the time at which the support study was prepared (May 2019). The geographic focus was the 28 EU Member States. 2.BACKGROUND TO THE INITIATIVE

2.1.Description of the initiative The Directive merged four directives on equal opportunities and equal treatment of women and men, taking into account case-law from the CJEU, into a single more readable and accessible piece of legislation that consolidated, updated and modernised EU legislation on gender equality in matters of employment and occupation. The provisions of the Directive (see Annex 6) being evaluated were designed to make the implementation of the equal pay principle more effective, through preventing and combatting pay discrimination on the basis of sex. To this end, the Directive pursues the following specific objectives: ·establish legal clarity on the existing provisions applying the principle of equal opportunities and equal treatment, including the principle of equal pay for equal work or work of equal value, in particular by clarifying the concepts of ‘pay’ (art. 2(1)(a), ‘equal/same work’(art. 2(1)(a), and ‘work of equal value’ (recital 9); ·facilitate respect for EU rights on equal pay by putting in place adequate judicial and administrative procedures to enforce the obligations set out in the Directive; ·increase legal protection for a complainant by ensuring that the burden of proof shifts to the respondent where there appears to be a case of discrimination (a prima facie case) by extending the rules on the burden of proof to the area of occupational social security schemes. The Directive set out actions to achieve these objectives: social partners were encouraged to take part in negotiations on equal pay and to promote gender-neutral systems for evaluating and classifying jobs; courts were expected to implement the shift of the burden of proof to respondent; and Member States were required to introduce real and effective compensation or reparation and dissuasive sanctions, and ensure monitoring and enforcement of the equal pay principle. Following the report on the implementation of the Directive in 2013 and given the incomplete application of the principle of equal pay for equal work and work of equal value and related implementation challenges, a Recommendation was made to complement the Directive, covering the need for greater pay transparency. Member States were encouraged to adopt at least one of four core measures set out in the Recommendation and employers were expected to comply by responding to employee requests for pay information and/or by carrying out pay reports or audits. The Recommendation sought to encourage companies to analyse and review their pay structures and to improve social partners’ involvement in fighting conscious and unconscious gender bias in setting pay as part of the collective bargaining process. The four main measures promoted in the Recommendation are: ·Right to information on pay levels: this right allows employees to request information on pay levels (including elements beyond fixed basic salary, such as bonuses), broken down by gender, for categories of employees doing the same work or work of equal value. ·Pay reporting: employers with at least 50 employees should regularly report to employees, workers’ representatives and social partners on the average remuneration by category of employee or position, broken down by gender. This measure is aimed at smaller companies and requires simple reporting of information that is usually already collected by the companies’ human resources systems. ·Pay audit: this transparency measure includes an analysis of the proportion of women and men in each category of employee or position, an analysis of the job evaluation and classification system used, and detailed information on pay and pay differentials on grounds of gender. The Recommendation suggests applying these measures only to companies with at least 250 employees, as audits may involve additional costs. The results of the audit should be made available to workers’ representatives and social partners on request. ·Collective bargaining on equal pay: equal pay, including pay audits, should be discussed at the appropriate level of collective bargaining. The intervention logic of the EU action - a diagram summarising how the EU action was (originally) expected to work (i.e. at the time of adoption / implementation), including identifying the underlying assumptions depicted in Annex 4. The objective of the EU action was to promote the EU principle of and fundamental right to equal pay between women and men by allowing easier access to justice for victims of gender-based pay discrimination and the better enforcement of the principle of equal pay, including by promoting pay transparency measures. The operational measures available to Member States to implement the EU action should have allowed to improve pay transparency and should have created a supportive mechanism for victims of pay discrimination. As a result, greater awareness on the right of equal pay, remedies for gender pay discrimination and knowledge on the pay structure applied at the workplace, job satisfaction as well as better application of the equal pay provisions in national courts should have materialised. 2.2.Baseline

Prior to 2006, the EU adopted a number of legal instruments to address equal pay between women and men, as part of its broader work on gender equality and the CJEU consolidated its interpretation of EU rules with key case-law (see Annex 7). EU Member States were bound by gender equality obligations under the Treaty and a number of directives implementing the principle of equal treatment for men and women. Beginning with the Equal Pay Directive of 1975, the EU has adopted nine directives implementing the principle of equality between men and women in the areas of employment, work and social security. They contained equality guarantees (for example equal treatment in access to employment or equal pay) and special rights (for example pregnancy protection, maternity leave or parental leave). In addition to the Equal Pay Directive, the Equal Treatment Directive and the Burden of Proof Directive were of particular relevance to the institution of equal pay. International obligations and standards also apply to Member States. The key EU political strategy in place when the Directive was adopted was the ‘Lisbon strategy’. In the European employment strategy (EES), gender equality issues featured prominently as one of the main tools to achieve high employment levels in the EU, reflecting the parallel development of the Beijing Platform for Action in the context of the 1995 UN Summit on Women. Following the mid-term review of the EES in December 2001, the gender pay gap was recognised as a key indicator for measuring progress towards gender equality. This is calculates as the difference between average gross hourly earnings of male paid employees and of female paid employees as a percentage of average gross hourly earnings of male paid employees. This means that salaries in all sectors, occupations and career patterns are considered together. It summarises all differences between men and women in terms of pay and is therefore a handy tool for communication and policy-making. Nevertheless, interpreting the gender pay gap is not entirely straightforward (See Annex 3). In particular, it is important to stress that it includes issues other than direct gender pay discrimination, i.e. women being paid less for the same work because they are women. It also includes the influence of all possible gender imbalances on the labour market, namely labour segregation, constraints relating to care related career breaks and differences in working hours (part-time vs. full-time) and unobservable variables such as negotiating skills and personal preferences. These factors can be gender biased but are not necessarily related solely to gender pay discrimination. According to the intervention logic in Annex 4, the expectation of pay discrimination and undervaluation of work influences the extent to which women are active on the labour market. The presented indicators match only some elements of the intervention logic and are limited by data availability. For example, quantitative data across the EU could not be gathered for career progression, reputational impacts on employers and occurrence of gender-based pay discrimination. Impact indicators include gender pay gap, representation on company boards, labour force participation and elderly poverty. Outcome indicators include job satisfaction. Additional relevant indicators (e.g. employment rate and part-time work) are also included in the baseline. To give an overview of the baseline scenario, Table 1 sets out a selection of indicators broadly related to equal pay between men and women for the years 2006 (year of the adoption of the Directive) and 2014 (year of adoption of the Recommendation). Table 1. Baseline indicators — 2006 and 2014

Directive Recommendation Source 2006 (EU-25) 2006 (EU-28) 2014 (EU-25) 2014 (EU-28) Gender pay gapa 18.0% 17.6% 17.1% 16.7% Eurostat - sdg_05_20 Median hourly earningsb 10.5 (F) 12.4 (M) 10.6 (F)c 12.3 (M)c 11.9 (F) 13.9 (M) 12.2 (F) 14.1 (M) Eurostat — earn_ses_pub2s Elderly poverty 20.2% (F) 15.3% (M) 19.2%c (F) 14.5%c (M) 15.0% (F) 10.8% (M) 15.7% (F) 11.2% (M) Eurostat — ilc_li02 (ages 65+) Labour force participationb 64.0% (F) 78.4% (M) 62.7% (F) 77.4% (M) 67.9% (F) 78.8% (M) 66.5% (F) 78.1% (M) Eurostat — lfsa_argan Employment rateb 58.3% (F) 72.5% (M) 57.0% (F) 71.4% (M) 61.3% (F) 71.2% (M) 59.5% (F) 70.0% (M) Eurostat — lfsa_ergan Part-time work as a share of total employment b 26.5% (F) 6.2% (M) 29.8% (F) 6.2% (M) 32.1% (F) 8.7% (M) 32.2% (F) 8.8% (M) Eurostat — lfsi_pt_a Representation of women on company boardse 8.9% 9.1% 21.3% 20.8% EIGE gender Statistics database Job satisfactionf 84% (F) 82.7% (M) 82.7% (F) 81.1% (M) 85.4% (F) 85.8% (M) 85.6% (F) 85.7% (M) European Working Conditions Survey Note: Country-level results are available in Annex 3 — EU-25 and EU-28 figures for employment, labour market participation and part-time work are weighted by the number of employees. EU-25 and EU-28 figures for elderly poverty are weighted by population. a Figures for EU-25 exclude Ireland and Greece due to missing data. Figures for EU-28 also exclude Croatia. b Average values for women (F) and average values for men (M) from 15 to 64 years. c Croatia not included. e Data at end of the year. f Share of respondents who reported being very satisfied or satisfied with their job. Data are available for 2005, 2010 and 2015. Data reported refer to 2006 and 2015 instead of 2006 and 2014. Overall, the baseline indicators highlight a disadvantage for women in the labour market, which also result in an increased risk of poverty at older age. In 2006, the average hourly wage among women was 18% lower than the average hourly wage of men in the EU. In absolute terms, this corresponds to median hourly earnings, which approximate the ‘typical earnings’ better than the average, of around €2 per hour less for women. A decomposition of the gender pay gap in 2006 using wage data from 21 Member States shows the large proportion of the gender pay gap not accounted for by demographic and occupational characteristics (see Figure 1). This may stem from gender-based discrimination, as well as other factors that cannot be directly measured, such as negotiating capacity. Figure 1. Decomposition of the gender pay gap (2006) Note: Analysis carried out by the evaluation team using the Structure of Earnings Survey. In 2006, women’s participation in the labour market was substantially lower than men’s, in relation to activity rates and employment rates (about 14 percentage points (p.p.) difference for both) and the ratio of part-time work was about four times higher (see Table 1). The impact of these factors on pension entitlements may be one of the factors explaining the higher level of poverty among older women (+4.9 p.p.). The baseline indicators also highlight a clear ‘glass ceiling’, where women are limited in their upwards progression within an organisation, with women making up only an estimated 9% of those serving on the boards of large companies listed on the national stock exchange in 2006. While the intervention logic in Annex 4 suggests that activity and employment rates, part-time work and vertical segregation would not be directly affected by EU action, they are nevertheless closely intertwined with the gender pay gap and must be considered in the evaluation, particularly when considering the impact attributed to the intervention versus other external factors. In 2006, job satisfaction among employed people was similar for women and men, with slightly higher levels for women. This is consistent with studies that found women report higher job satisfaction despite having jobs with worse conditions. Research shows that the difference in job satisfaction narrows for younger and more highly educated women working in male-dominated fields, which suggests that gender differences in job satisfaction may be due to gender differences in job expectations. Finally, in 2006, gender-based discrimination was perceived as widespread by an average of 40% of the EU population, with a significant proportion of respondents (an average of 27% across the EU) reporting that gender-based discrimination had increased in the course of the previous 5 years. 3.PROCESS, METHODOLOGY AND LIMITATIONS

This evaluation complements existing knowledge from the 2013 report on implementing the Directive and the 2017 report on implementing the Recommendation, which identified persistent problems with the practical enforcement and legal interpretation of the principle of ‘equal pay for equal work or work of equal value’, a lack of transparency in pay systems and procedural obstacles. The analysis in this document is largely based on the outcomes of an external study (support study) carried out by ICF in 2018/2019. This support study includes extensive data on the functioning of equal pay provisions within EU Member States. The data were gathered through desk and national research, including on national and CJEU case law, evidence from equality bodies, a targeted stakeholder consultation survey, interviews with national stakeholders and various national and EU experts, and data analysis including a decomposition of the gender pay gap using Structure of Earnings Survey microdata (see Annex 3). The other source for qualitative data is the outcome of the stakeholders’ consultations carried out by the European Commission (see Annex 2 for more details). These include a public consultation carried out between 11 January and 5 April 2019 which received 386 replies and 16 position papers, and a targeted expert seminar with social partners (7 May 2019, Brussels). Quantitative and qualitative information from this wide range of sources were triangulated and synthesised to generate findings for each evaluation question (see Annex 5). The evaluation faced some difficulties in producing robust quantitative comparisons. As mentioned (see also Annex 3), there are a number of caveats in the methodology for evaluating equal pay provisions. They mostly relate to data limitations, but the way the legal provisions are framed also plays a role. First and foremost, it is not possible to precisely identify the percentage of the gender pay gap resulting specifically from pay discrimination. This limitation has obvious implications for the assessment of the scope of the problem. As mentioned, the persistence of the gender pay gap (at an average level of 15.7% in 2018, ranging from 3 % in Romania to 22.7% in Estonia) suggests gender bias on the labour market which might translate also into gender pay discrimination. Though it is not possible to directly measure this phenomenon, there is a large public perception that such pay discrimination exists. According to a Eurobarometer survey, 69% of EU citizens believe that women earn less than men for each hour of work. This percentage, however, varies substantially across the Member States from 94% in Sweden to 31% in Romania (where 52% believe that women and men earn an equivalent wage). When asked about their perceptions of pay discrimination within their own company, people are less concerned, but many still believe there is a problem: 51% believe that women, on average, are paid the same as men, with a maximum of 56% in Czechia. From a conceptual point of view, the definition itself of gender pay discrimination can be problematic. Broadly speaking, asymmetries in the opportunities to acquire skills and experience translate into pay differences. It is therefore incorrect to assume that gender pay differences linked to education and working patterns are legitimate, because they might well reflect discrimination and undervaluation of female work and capacities instead of different skills, qualifications and work experience. However, it is worth remembering that the purpose of the provisions analysed here is to enforce the equal pay principle i.e. to redress specific situations where the same skills required to perform a specific job are remunerated differently depending on the sex of the worker. While it is reasonable to expect that correcting these imbalances in the pay structure would ultimately also have an effect on the gender pay gap, the purpose of the provisions is not to correct all gender-motivated pay discrepancies (which could translate into closing the gender pay gap) but to enforce a fundamental right. The Blinder-Oaxaca decomposition of the gender pay gap identifies a ‘residual’ portion of the gender pay gap that gives a rough quantitative illustration of the possible relevance of pay discrimination to the gender pay gap. However, this portion also accounts for the impact of parenthood on wages and other aspects such as preferences, the relative negotiating advantage linked to scarcity premiums, or individual productivity and so it cannot be used as a proxy. More broadly, it is not possible to provide an estimate of the extent to which pay differentials are gender motivated because there is no aggregate measure that allows measuring (direct and indirect) discrimination per se. It can only be gauged indirectly, looking at structural differences. These limitations were taken into account in the evaluation, which does not consider that the unexplained part of the gender pay gap only result from gender discrimination However, given that the gender pay gap shows a structural / systemic pay difference across the economy that goes beyond the individual characteristics of working men and women, it is considered a good indicator of inequalities in access to work, progression and rewards; and as such relevant in discussing the equal pay issues. Such it is referred to in this evaluation also for lack of more specific indicators. Secondly, it is not realistic to expect that the gender pay gap can be substantially decreased by better enforcing equal pay laws. The core measures by the EU action address only some of the factors underlying the gender pay gap, with less of an effect on others. Consequently, even with effective enforcement of the existing EU legislation, wider problems affecting pay differences may still persist. This is primarily due to the unequal distribution of unpaid work between women and men. Since women continue to take on more responsibility than men for most domestic and caring tasks within the home, they tend to work fewer paid hours, with consequences for pay and promotion. In this context, the Directive on work-life balance for parents and carers was adopted in June 2019 specifically to support more equal sharing of caring responsibilities between women and men, thereby creating more opportunities for women to participate in the labour market. The Directive is accompanied by non-legislative measures to increase the availability of accessible, affordable and high quality childcare and remove remaining tax disincentives which deter second earners, who are most often women, from engaging in paid work or increasing their working hours. Thirdly, particularly if they work part-time, women face persisting gender segregation into particular types of occupations, firms or sectors. This kind of segregation limits the applicability and effectiveness of equal pay laws, due to the scarcity of male comparators within the same employing organisation undertaking equivalent work. Since the principle of equal pay is set in EU law as an individual right, litigants must build their complaint for discrimination on the direct comparison of male-female wage from the same employer. This in practice excludes the possibility of comparing ‘equivalent’ jobs (in terms of work demands and/or level of professional skills) across occupations, in particular between male-dominated occupations and female-dominated ones, since this implies different employers. As a result, segregation facilitates the persistent undervaluation of women’s work in certain professions and women often find themselves in occupations with the lowest pay scales. With new and improved rights to request flexible working arrangements in any sector, the 2019 Work-Life Balance Directive could also help reduce this kind of occupational segregation (assuming it is not counter-balanced by a larger increase in female part-time in low paid sectors). These issues might also at least partly explain the scarcity of the number of equal pay cases which has led to a gap in a robust understanding of how EU legislation is implemented by courts. Few claims of gender pay discrimination reach the national courts, as confirmed in this evaluation (see Section 5.1). Therefore, the conclusions drawn are based on the few cases identified and suggest an issue relating to access to justice in general. Finally, the considerable variation in measures and approaches to implementing equal pay provisions across the EU Member States makes it challenging to draw overall comparisons and findings.

4.IMPLEMENTATION AND STATE OF PLAY

The 2006 Directive consolidated EU law on equal treatment between women and men in the area of employment and occupation by bringing together, modernising and simplifying the provisions in previous Directives and incorporating case law from the CJEU. It added a definition of pay, consolidated concepts such as ‘the reversed burden of proof’ and ‘victimisation’ and explicitly extended the application of equal treatment in occupational social security schemes in line with the CJEU’s case law. The transposition and implementation of the Directive by Member States focused primarily on these elements. Article 33 of the Directive required Member States to bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 15 August 2008 at the latest or to ensure, by that date, that management and labour implement its provisions by way of agreement. The Commission examined the compliance of national legislation in all Member States. Following detailed discussions with Member States, and following the adoption of additional legislation in some Member States, the Commission considered that most issues of compliance were resolved. Infringement proceedings were, however, launched in 2013 in relation to 3 Member States. One set of proceedings was closed in 2017 following adoption of legislation regarding return to work after paternity and adoption leave in the Member State concerned (Lithuania). At the time of writing, the remaining two cases are still open and being monitored (relating to the definition and scope of compensation in Poland and the scope of protection against victimisation in Belgium). The Commission is in discussions with 2 Member States regarding other questions related to the gender pay gap, namely: the payment of certain categories of workers who are absent from work for pregnancy-related illness, and the effectiveness of the equality body. The 2013 Directive implementation report In its 2013 implementation report, the Commission reviewed the transposition of the Directive in all Member States. 14 Member States had adopted new measures or amended existing legislation to transpose the Directive; 11 Member States already had legislation in place in line with the Directive’s obligations and the 3 remaining Member States (Bulgaria, Romania and Croatia) introduced legislation as part of their accession to the EU. The 2013 report assessed in particular Member States’ transposition of the Directive’s novel features and the effectiveness of its application and enforcement. It highlighted that the practical application of the equal pay provisions was one of the Directive’s most problematic areas. The results of the 2013 assessment of the implementation of the relevant equal pay provisions of the Directive are further described in Section 5.1. The 2014 Pay Transparency Recommendation The 2013 findings on the application in practice of the equal pay provisions led to the adoption of the Recommendation in 2014. The Recommendation provides guidance to help Member States implement the equal pay principle more effectively and proposes measures to support the identification of unfair wage inequalities within companies and organisations. Table 2 below lists Member States that have revised existing or adopted pay transparency measures, grouped by the time of adoption or amendment. It also highlights Member States which had measures in place prior to the Recommendation but made amendments to those measures after 2014. The table shows that 7 Member States maintained measures already in place before 2014 and 6 others amended or adopted transparency measures after the adoption of the Recommendation. These measures are, however, not always in line with the Recommendation. For example, in the UK, the pay reporting measure only applies to employers with 250 or more employees, unlike the ‘50 or more’ set out in the Recommendation. In Germany, as another example, the pay audit measure is not mandatory and only applies to companies with at least 500 employees. Table 2. Pay transparency measures adopted by type and time of adoption Time of adoption Right to pay information Pay reporting Pay audit Collective bargaining Prior 2014 FI (2004, amended in 2014) AT (2011: companies of more than 150 workers); BE (2012); IT (2006: companies of at least 100 workers); FR (2013); UK (2010, amended in 2014: companies of at least 250 workers) FI (2005, amended in 2014); SE (1991) BE (2012); LU (1965) Amendment post 2014 DK (2016); PT (2019) SE (2017) FR (2018) Adopted post 2014 DE (2017: companies of at least 200 workers); ES (2019) ES (2019); LT (2016) DE (2017); FR (2019); PT (2019) Ireland and the Netherlands have an advanced draft of pay transparency legislation, but in the 13 other Member States not listed above, there are no pay transparency measures. The 2017 report on the implementation of the Pay Transparency Recommendation The findings of the 2013 implementation report on the Directive were confirmed in the implementation report on the Recommendation. These reports, as well as a study by the European legal network for gender equality, raise the following key issues which are explored further in Section 5.1: ·Application of equal pay concepts: The concepts of ‘pay’, ‘equal work’ and ‘work of equal value’ are not defined uniformly across national legislation. ·Possibility of justifying differences in pay: in pay discrimination claims, some courts accept employers’ justifications for pay differentials, unduly favouring employers and making access to justice difficult for victims. However, the report also notes that some Member States do not allow any such justifications. ·Implementation of ‘the reversed burden of proof’ varies among Member States and can be unclear. The shift of the burden of proof, leading to a more equitable sharing of the burden of proof between the victim and the employer in cases of discrimination, is not sufficiently actionable, due to a lack of clear rules on the level of evidence required for a presumption of discrimination triggering this shift in burden of proof. ·Limitation periods vary and, in some Member States, they are so short that they may not allow sufficient time for victims to make a claim. ·Lack of deterrent effect of penalties and low compensation levels: compensation awarded by courts varies across countries, tends to be low and rarely accounts for non-material damages. This does not motivate victims to claim their rights.

·Costs of proceedings impede access to justice. The costs of legal proceedings to access justice, both as regards legal representation and court fees, are a key disincentive for many victims, in particular in light of the low compensation levels even if successful. ·Lack of knowledge of gender pay discrimination rules on the part of employees. There is sometimes limited knowledge of equal pay legislation and how to enforce existing rights on the part of employees, trade unions, lawyers and even judges. ·Lack of clarity on and awareness of the powers of national equality bodies. The powers of national gender equality bodies vary across the EU and only some Member States allow equality bodies to represent individuals in equal pay claims. ·Lack of promotion, development and use of gender-neutral job evaluation and classification systems. While in some Member States, legislation or collective agreements explicitly require job evaluation and classification systems to be gender-neutral, in others there is no such requirement, or at least not an explicit requirement. ·Barriers to pay transparency and lack of transparency in pay systems. Accessing pay information is difficult, which restricts awareness of gender pay discrimination and the ability to support pay discrimination claims. Individual pay information is confidential, which undermines pay transparency. This evaluation

This evaluation investigates the extent to which the issues identified by the 2017 report remain problematic in the Member States. Table 3 below summarises the assessments carried out as part of the support study. Table 3. State of play — mapping of the issues by relevance Issue Absent Limited Moderate Significant Issue of legal clarity on concept of equal pay for equal work or work of equal value BE, IE, LU, NL, PL CY, DE, ES, HR, PT, SE, UK FR, LV, MT, SK AT, BG, CZ, DK, EE, EL, HU, IT, LT, SI, FI Access to justice and defence of rights DK, FR, HU, IT, PT AT, CY, ES, FI, IE, LT, MT, SE BE, BG, CZ, DE, EE, EL, HR, LU, LV, NL, PL, RO SI, SK, UK Compensation or reparation to victims CY, ES, FR, IE, LU, MT AT, BE, BG, CZ, DK, FI, PT, RO, SE, UK DE, EE, EL, HR, HU, IT, LT, LV, NL, PL, SI, SK Application of the reversed burden of proof SE BE, DE, DK, ES, FI, FR, HU, IE, IT, LT, LU, LV, MT, PT, RO, UK AT, BG, CY, CZ, EE, EL, HR, NL, PL, SI, SK Promotion, development and use of gender-neutral job evaluation and classifications BE, ES, IE, IT, LT, LU, NL CZ, FI, HU, PL, RO, SE, SI, SK, UK AT, BG, CY, DE, DK, EE, EL, FR, HR, LV, MT, PT Clear powers and promotion of equality bodies BE, CZ, FR, HU, LU DK, FI, HR, LT, NL, RO, SE CY, DE, ES, IT, LV, MT, SI AT, BG, EE, EL, IE, LU, PL, PT, SK, UK Source: ICF country fiches (2019). 5.ANALYSIS AND ANSWERS TO THE EVALUATION QUESTIONS

The EU law action was evaluated on the basis of five criteria: effectiveness, efficiency, relevance, coherence and EU added value. 5.1.Effectiveness The assessment of effectiveness considers how successful EU action has been in achieving or making progressing to achieving its objectives. Performance indicators allow the extent to which that purpose has been achieved to be measured. As summarised in the intervention logic (see Annex 4), the needs that the Directive aimed to address were on three interlinked levels: 1.the guarantee of an EU fundamental right, i.e. non-discrimination on grounds of sex; 2.the economic necessity to facilitate female labour market participation by removing one of many barriers; and 3.the enforcement of the principle of equal pay between women and men enshrined in the Treaty. Since it is not possible to measure specifically the impact on gender pay discrimination of measures driven by the EU action, because it is not possible to disentangle the portion of the gender pay gap linked to it, the impact of these measures can be only indirectly gauged through the broader impact on gender equality in the labour market and society. The Directive’s aim, reinforced by the Recommendation, is ‘to ensure the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation’ (Art. 1). This broader objective builds on the three specific aspects mentioned in Section 2.1: 1)legal clarity on the application of the principle of equal opportunities and equal treatment, including the principle of equal pay for equal work or work of equal value, especially by clarifying the concepts of ‘pay’, ‘equal work’, and ‘work of equal value’;

2)facilitating respect for EU rights on equal pay by putting in place adequate judicial or administrative procedures for monitoring and enforcement of the Directive’s requirements e.g. the introduction of job classification and evaluation systems based on the same criteria for both women and men; and 3)facilitating access to justice with legal protection for a complainant by shifting the burden of proof to the respondent where there is a prima facie case of discrimination. The analysis of the effectiveness of EU action in relation these three aspects relies mostly on a qualitative assessment provided by national experts involved in the evaluation. Specific quantitative data to construct relevant indicators for the broader impacts of the measures hypothesised in the intervention logic (see Annex 4) are, for the reasons mentioned above, scarce. Since external economic and social factors (such as economic growth and demographic trends) are more likely to shape the overall trend of the gender pay gap, it is not possible to disentangle the specific effect of the Directive. Member States were starting from different positions in 2006 as this was a ‘recast’ directive integrating previous directives and case-law of the Court of Justice. Therefore, the degree of implementation of the Directive itself does not reflect the level of compliance with the Directive’s content in the Member State concerned. Nevertheless, a quantitative analysis of the trend of the relevant indicators selected for the baseline and an econometric analysis of gender pay gap components attempts to shed light on the effects at macro-level. 5.1.1. Implementation of the concepts of ‘equal pay’, ‘same work’ and ‘work of equal value’ in national legislation and practice The concepts of ‘pay’, ‘equal pay’, ‘same work’ and ‘work of equal value’ are derived directly from Article 157 TFEU. The Directive’s primary objective, set out in the first recital, was to clarify the provisions of existing directives implementing these Treaty provisions, in particular by incorporating certain developments from the case-law of the CJEU, including regarding the legal concepts of ‘equal pay’, ‘same work’, and ‘work of equal value’. The concept of ‘pay’ The CJEU interpreted the concept of ‘pay’ to include not only salary, but also additional benefits such as bonuses, overtime compensation, travel facilities, compensation for attending training, payments in case of dismissal, statutory sick pay, statutory required compensation and occupational pensions. In order to clarify the concept of ‘pay’, Article 2(e) of the Directive recalls the Treaty definition of ‘pay’ as ‘the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his/her employment from his/her employer’. The Directive took account of CJEU case-law clarifying the concept of ‘pay’. As such, the concept of ‘pay’ in the Directive also includes: ·all forms of occupational pensions (recital 13); ·benefits from pension schemes for public servants if those benefits payable under the scheme are paid to the worker by reason of his/her employment relationship with the public employer, even if such schemes form part of a general statutory scheme. That will be the case if the pension scheme concerns a particular category of workers and its benefits are directly related to the period of service and calculated by reference to the public servant’s final salary (Article 7(2) and recital 14). In addition, the Directive clarifies that an inequality in employers’ contributions paid under funded defined-benefit schemes which is due to the use of actuarial factors differing according to sex does not come in the scope of Article 157 TFEU (Article 9(1)(h) and recital 15). While actuarial factors differing according to sex cannot be used to calculate male and female workers’ contributions (Article 9(1)(j)), the use of such differing actuarial factors to calculate employers’ contributions is under certain circumstances permitted by the Directive as not contrary to the principle of equal treatment (Article 9(1)(j)). Recital 16 further clarifies to which elements of funded defined-benefit schemes this exemption may apply. The Directive also draws attention to the content of Protocol 17 concerning Article 141 (now 157) of the TFEU, according to which benefits payable under occupational social security schemes are not to be considered as remuneration insofar as they are attributable to periods of employment prior to 17 May 1990, except in some well-defined cases. According to Better Regulation standards, the definition of ‘pay’ was considered to be a ‘substantial change’ compared to the pre-existing directives. This required, according to Article 33 of the Directive, explicit transposition in national law. The Directive’s definition is broad and encompassing, but lacks the necessary complexity and precision that characterises the CJEU case-law. All Member States but six have implemented the concept of pay contained in the Directive. In the UK and Latvia, where no codified definition exists, national case-law has developed a definition in line with EU law. In two Member States Lithuania and Romania) which have implemented the definition, uncertainty in the interpretation of the law remains. This may be due to an incomplete implementation: for instance, indirect payments are not mentioned in the Lithuanian law, thus excluding various benefits or services provided by third parties (including insurance or pension benefits) from the domestic concept of pay. Finally, in the Netherlands and Portugal, experts have noted that even if the definitions of ‘pay’ are not as well-developed as in EU legislation, the meaning is the same in practice. The concepts of ‘same work’ and ‘work of equal value’ The Directive does not contain a binding definition of ‘same work’ and ‘work of equal value’ (these concepts are only referred to in Recitals 9 and 10 of the Directive). In order to determine whether workers are performing the same work or work of equal value, it should be determined whether they can be considered to be in a comparable situation. In order to make that determination, a range of factors should be taken into account, including the nature of the work and training and working conditions. Furthermore, under certain conditions established by the CJEU, the comparison should not necessarily be limited to situations in which men and women work for the same employer. The 2014 Pay Transparency Recommendation invited Member States to clarify the concept of ‘work of equal value’ in their national legislation. It indicated that the value of work should be assessed and compared based on objective criteria, such as educational, professional and training requirements, skills, effort and responsibility, work undertaken and the nature of tasks involved. Even if EU Member States have included the concepts of ‘equal/same work’, ‘work of equal value’ or ‘equivalent work’ in their legislation, and despite the guidelines given by the CJEU that are incorporated in the preamble to the Directive and the 2014 Pay Transparency Recommendation, these concepts still are not always defined in national legislation, and where they are defined, it is not done uniformly in various Member States. This affects the ability of complainants in pay discrimination cases to establish a valid comparator; moreover, it also creates substantially heterogeneous situations in EU Member States. Some countries (BG, FI, IT, LV, MT, PL, SI, EE) have no legal definition at all, and even where a definition exists (CZ, DK, EE, EL, FR, HR, HU, IE, PT, SE, SK, UK) experts report practical problems in clarity and lack of understanding of the concepts. Experts report difficulties, for instance, in identifying a ‘comparator’ because national legislation is restrictive on what is considered ‘work of equal value’. The identification of a comparator is a crucial parameter in determining whether work may be considered ‘of equal value’. The CJEU has developed jurisprudence to determine whether two different groups of workers perform work of equal value, taking into account the overall nature of the work, the responsibility involved, the training requirements and the working conditions. The CJEU indicated — as far back as 1982 — that Member States should ensure workers can claim before a competent authority, by a binding decision and through effective means, the application of the right to equal pay for work of equal value. That authority, which can be courts, would be empowered to assess which work has the same value in application of the Treaty and the Directive. However, the lack of parameters for the implementation of the concept can lead to difficulties in its application by courts. National legislation does not always elaborate on the definitions and parameters, as this is not imposed by the Directive and thus is left to the discretion of the courts’ interpretation. Only 10 Member States have laid down specific parameters and criteria for establishing the equal value of the work performed (BG, HR, CZ, FR, HU, IE, PL, PT, SE, the UK). Since the number of cases brought before the courts is low, it is difficult to develop consistent jurisprudence; at the same time, as in a vicious circle, there is little incentive to file complaints. The CJEU has held that although the comparator does not necessarily need to be employed at the same time as the complainant, but comparisons must be made ‘on the basis of concrete appraisals of the work actually performed by employees of different sex’. To date, 11 Member States require an actual comparator to be identified, while 11 others allow a hypothetical comparator. In the 6 remaining Member States, case-law and national legislation remain unclear on this point.

The requirements for a real-life comparator can be very narrow. In seven Member States, the comparator must be employed by the same employer, thus preventing comparisons across sectors and companies. According to some authors, this requirement reduces the effectiveness of the concept of ‘work of equal value’ in highly segregated labour markets and limits the probability of finding an individual undertaking similar tasks within the company or similar companies in the same highly segregated sector. However, in some Member States, wages in these sectors (such as education and healthcare) are set by the public sector. While pay may be equal within the sector, pay inequality can transpire when compared to highly segregated male-dominated sectors with similar training requirements and working conditions, where equal value is harder to establish. Those male-dominated sectors are likely to be private sector driven with higher set wages. This contributes to the gender pay gap and arises from indirect discrimination, which is harder to establish. In the UK, in the ASDA case, the claimants (mostly women working in the respondent’s supermarkets) were entitled to compare themselves, for equal pay purposes, to employees working in the respondent’s distribution operation. Even though they did not work in the same establishment, claimants claimed that ‘common terms of employment’ applied to both retail and distribution workers. The Court agreed that the respondent applied common terms and conditions to both retail and distribution workers ‘wherever they work’. The phrase ‘wherever they work’ allows reference to comparators who work in a different workplace because the nature of their tasks is different. National experts involved in the evaluation emphasise, however, that the use of such flexible comparators remains very rare. Finding the right comparator may be even more challenging in Member States where secrecy or confidentiality clauses regarding pay are included in employment contracts. In Luxembourg, for instance, courts have denied access to information about colleagues’ pay in several cases on this basis. Allowing reference to a hypothetical comparator enables more effective correction of the gender pay gap in highly segregated labour markets. In France, Portugal and Spain, a comparison may be made with employees that previously worked in the same job. In France, Hungary and Denmark, claimants can argue that a discriminatory preference exists without referring to any particular employee as a comparison. Finding the right comparator depends on many factors. It will be more difficult in the absence of established job evaluation/classification systems and in the absence of pay transparency and pay information rights. In Member States where pay inequalities are not reported, it is evidently very difficult to find a real-life comparator with a higher salary. The lack of clear concepts used to evaluate whether men and women receive equal pay and of clear assessment criteria for comparing different jobs is a major obstacle in addressing pay discrimination, due to the gender-segregated structure of the labour market and the undervaluation of female-dominated professions. Conclusion on the effectiveness of EU action concerning the clarity of equal pay concepts To ensure enforcement of the fundamental right to equal pay, the concepts of ‘pay’, ‘same work’ and ‘work of equal value’ must be clarified. While the Directive has improved the consistent interpretation of these concepts, they remain difficult to circumscribe in practice. 15 national legal experts rated the relevance of the problem as ‘moderate’ or ‘significant’, leaving 12 experts considering it of ‘limited’ or no importance. Over one third of the respondents in the public consultation highlighted the lack of legal clarity as the main obstacle to the effective implementation of the equal pay principle. Both the European Parliament and the European legal experts on gender equality point out that most Member States simply transposed the provisions of the Directive textually, without any further guideline or indication on how to apply them. This leads to a lack of parameters and indicators permitting implementation at national level. The Court of Justice has played a very significant role in ensuring enforcement of the right to equal pay between men and women. First of all, the Court has given substantial guidelines on how to interpret the concepts used to guarantee equal pay. In addition, the Court has ensured that workers have the right to effectively claim their rights in practice: in case C-61/81, the CJEU, with regard to the predecessor of the Directive, namely Directive 75/117/EEC, held that Member States must guarantee the right of workers, in the absence of a job classification system, to claim before an appropriate authority that their work is of the same value as other work, and, if that is found to be the case, to have their rights under EU law acknowledged by a binding decision. The case related to workers in the UK, who were only able to claim their right to equal pay on the basis of a job classification system. Such a system was, however, not mandatory for employers. As a result, people who worked for employers that did not have a job classification system were not able to claim their rights. The Court held that UK had not taken the necessary measures to ensure that the principle of equal pay is applied. 5.1.2. Effectiveness of EU action in terms of access to justice The Directive contains a number of important procedural provisions which are key to ensuring enforcement of the equal pay principle. These provisions include: ·the opportunity to defend victims’ rights; ·the sharing between employers and victims of the responsibility to prove the absence/presence of discrimination where a prima facie case is established; ·the curtailing of retaliation against employees who complain about pay discrimination (such behaviour is known as ‘victimisation’); ·the incentives to seek justice through the payment of compensation or reparation to victims of discrimination. All of these provisions are considered important by national experts and respondents in the public consultation. Nevertheless, several problems have been highlighted as regards their application in practice. In general, national experts consider the protection against victimisation entirely satisfactory in four Member States. The application of the rules on the shared burden of proof is considered the most problematic issue in 27 Member States, followed by defence rights (23) and compensation (22). A detailed assessment is presented below, broken down by provision. Defence of rights (Article 17) Article 17 requires Member States to ensure access to judicial procedures for the enforcement of the rights and obligations granted by the Directive. Such access must be available, after possible recourse to conciliation procedures and even after the end of the employment relationship in which the discrimination is alleged to have occurred. In addition, the Directive provides that Member States must ensure that organisations or other entities with a legitimate interest may act on behalf or in support of discrimination victims in judicial or administrative proceedings. Finally, Article 17(3) provides that the time limits to bring actions remain exclusively governed by national law. The support of victims by organisations or other entities with a legitimate interest

Article 17(2) is implemented in Member State legislation by enabling collective redress or by allowing victims to be represented in court by certain organisations such as trade unions, NGOs or equality bodies (See Table 4 below). Table 4. Organisations that can act on behalf or in support of victims Equality body Trade unions NGOs with legitimate interest Other 18: BE, DK, EE, EL, ES, FI, FR, HR, HU, IE, IT, LV, NL, PL, SE, SI, SK, UK 26: AT, BE, BG, CY, DE, DK, EE, EL, ES, FI, FR, HU, IE, IT, LT, LU, LV, MT, NL, PL, PT, RO, SE, SI, SK, UK 20: BE, BG, CY, CZ, EL, ES, FR, HR, HU, IE, IT, LT, LU, LV, MT, NL, SE, SI, SK, UK AT: Ombudsman supports before the Equal Treatment Commission BG: equality body is a quasi-judicial body issuing decisions CZ, FR, NL, UK: Collective action allowed Source: ICF (2019), Country fiches; Equinet website The degree of involvement of these organisations varies. In 18 Member States, equality bodies have the power to bring cases to court or to represent the claimant before courts or administrative bodies. In Member States where the equality body is not empowered to bring cases to court, it can nevertheless assist and advise victims (e.g. AT) and, in some cases, issue binding (BG, CY, LT, MT, PT, RO) or non-binding decisions (CZ, DE, FR, LU). Collective action is possible in only four Member States (CZ, FR, NL, UK). Some legal experts (especially from EL, LT, LU, SI and UK) noted that while organisations may be empowered by law to bring cases or represent victims before courts, in practice they do not make use of these opportunities, usually because of lack of resources or expertise. Such organisations report being ill-equipped and insufficiently funded to handle the complex and lengthy litigation that equal pay claims often involve. Some opt to support strategically important equal pay cases only. Limitation periods One important problem highlighted by experts and stakeholders concerns the length of limitation periods, which remain exclusively governed by national law (Article 17(3)). In some Member States (DE, LV, EE, SI), the time limit to bring a case to court is simply too short, ranging from 30 days to 3 months. Victims need time to gather the necessary evidence, which can be a complex and difficult exercise, particularly if there is no transparency on pay structures and wages. Victims therefore often lack the time to take action once they become aware of the discrimination. Some victims already move on to another job before considering filing an action against their previous employer. Many victims decide simply not to bother because of the unsurmountable difficulties involved in taking the necessary action within the required time limits. Effective compensation or reparation (Article 18) The Directive requires Member States to ensure real, effective, dissuasive and proportionate compensation or reparation for loss and damage sustained as a result of pay discrimination on the grounds of sex. Member States must not impose a prior upper limit on the compensation or reparation, unless the employer can prove that the only damage suffered by the claimant is the refusal to take his/her job application into account. As presented in Table 5 below, 18 Member States ensure compensation for material damages; non-material damages may be compensated in 14 Member States. The level of compensation is usually (e.g. in AT, BE, FI, IT) calculated by the courts taking into account the circumstances of the individual case, such as the nature, extent and duration of the discrimination. In 13 Member States, the level of financial compensation may be up to the difference between the victim’s wage and the wage of the comparator. In two countries, fixed compensation amounts have been identified. In Belgium, the victim can opt for either a standard amount, which is 6 months’ salary covering both material and non-material damage, or the amount of the damage actually suffered by the worker. As this system does not fix a prior upper limit, it can be considered in line with the Directive. In Spain, the compensation must aim to restore, as far as possible, the integrity of the victim to the situation prior to the injury, as well as contribute to preventing harm. In Sweden, the Discrimination Act requires the compensation to fulfil both a reparative and a preventative purpose. Even though the preventative function was introduced (in 2008) to promote higher compensation levels, damages awarded generally remain low. Table 5. Types of compensation and reparation Levelling up Material damages Non-material damages Fixed compensation 13: AT, DE, DK, EL, FR, HR, HU, IE, LU, MT, NL, PT, UK 18: BE, BG, CY, CZ, EL, ES, FI, FR, HR, IT, LT, LV, MT, PL, PT, RO, SE, SK 14: AT, BG, CY, CZ, EL, ES, FI, HR, LT, LV, PT, RO, SE, SK BE: standard 6 months’ salary or the amount of the damage suffered SI: €500-5,000, depending on duration and seriousness of discrimination Source: ICF (2019), Country fiches Most national experts involved in the evaluation regard compensation or reparation of victims as an important (12) or moderate issue (10). If compensation amounts are too low, they are not sufficiently dissuasive for defendants; in addition, especially when compared to litigation costs, they discourage victims from taking judicial action against gender pay discrimination. While the issue of dissuasiveness may be offset by criminal sanctions (See 6) in certain countries (BE, CY, FI, LT, MT), legal experts note that civil compensation remains an important avenue of redress and dissuasiveness. In Belgium, victims prefer civil redress because the threshold for evidence is easier to reach than in criminal proceedings. In Cyprus, it is reported that the courts prefer to award civil compensation to address pay discrimination, shying away from imposing fines. Table 6. Types of penalties Administrative fines Criminal fines Imprisonment Other BG, CZ, EE*, EL, ES, FI, FR, HU, IT, LT, LU, LV, RO, SI, SK BE, CY, FI, LT, MT BE, CY, FI, LT, MT ES: automatic loss of aid, subsidies and benefits derived from the application of employment programmes HU: order the publication of its decision on its own website and that of the violator’s IE: carry out a full equality audit along with the implementation of equality procedures within a certain period and publication of the decision IT: the removal of an advantage from the discriminator such as subsidies or other public benefits RO: publication of the summary of the decision or judgment in the media UK: the tribunal is required to order the employer to carry out an equal pay audit Source: ICF country fiches (2019)

* Administrative fines can be imposed in Estonia, but in practice the labour inspectorate cannot enforce them due to limited resources.

Burden of proof (Article 19) It is generally very difficult for victims of discrimination, including pay discrimination, to meet the necessary legal standards to prove the existence and extent of the discrimination. The EU addressed this matter already back in 1997, in a directive specifically intended to alleviate the burden of proof in cases of discrimination based on sex. That directive was part of the recast exercise which resulted in the current Directive. Under the Directive, Member States must ensure that, when a claimant establishes ‘facts from which it may be presumed that there has been direct or indirect discrimination’, it is for the employer to prove that there has been no breach of the principle of equal pay (Article 19). While the reversal of the burden of proof and protection from victimisation can be considered to confer improved access to justice, these provisionsdepend heavily on their implementation in practice at national level. This includes how victims can establish the facts to qualify for the presumption of pay discrimination necessary to trigger the shared burden of proof. The burden of proof, in practice, continues to fall heavily on victims (see below). Pay transparency measures have the potential to support the implementation of the reversed burden of proof. This can assist female workers in determining the average pay for women and men. The Directive does not provide for binding pay transparency measures (such as the right to request pay information) that could facilitate the establishment of presumed pay discrimination. EU action provides for such provision in the form of soft law, as laid down in the Pay Transparency Recommendation. In Danfoss, the Court of Justice already held that where an employer’s pay system lacks transparency, the employer is responsible for proving that the system is not discriminatory. This enables workers to provide evidence from which discrimination can be presumed, thus triggering the reversed burden of proof. The provision on burden of proof has been transposed in all Member States’ national legislation, although the specific formulation varies among Member States: ·19 Member States (BE, BG, CY, EE, EL, ES, FI, IE, IT, LU, LV, MT, NL, PL, RO, SE, SI, SK, UK) require victims to establish prima facie discrimination in order to trigger the mechanism regarding the burden of proof. ·In Austria, the claimant must make pay discrimination based on sex ‘credible’ before the courts. Depending on the judge’s knowledge of the legislation and pay discrimination, this task may be more or less challenging. ·In DK, EE and HU also, once the employee presents credible arguments/facts, the employer must prove the lack of discrimination. These Member States refer explicitly to the concept of a ‘shared’ or ‘divided’ burden of proof. ·In France, employees must present evidence ‘that leads to believe that direct or indirect discrimination has taken place’. ·In Croatia, on the other hand, the claimant must present facts which ‘justify the suspicion that discriminatory treatment has occurred. ·In Lithuania, the victim must ‘indicate the fact of discrimination’. ·In Germany, victims need to supply circumstantial evidence that can prove the likelihood or lead to the assumption that a discriminatory act/fact exists, but it is not clear exactly what type of proof should be delivered. ·In Portugal, the claimant must indicate the worker(s) in relation to whom they feel they have been discriminated, and the employer must prove that the difference in treatment is not based on discrimination.

Experts from Member States highlight that in general it is not clear what standard should be met to establish the required presumption of discrimination that would tilt the burden of proof towards the employer, in favour of the victim. The concept used in the Directive, transposed in national law as requiring a ‘probability/credibility/likelihood’ of discrimination, may not correspond to standards of evidence applicable under national procedural law, making it difficult for courts to apply it in a consistent and transparent manner. For example, in Belgium, the Gender Equality Act provides for a presumption of discrimination and the defendant must prove that there has been no discrimination. It further details which elements can contribute to a presumed discrimination, such as the recurrence of the discrimination, or the victim being in a comparable situation to the reference person, as well as statistics in cases of indirect discrimination. In Portugal, the presumption of pay discrimination is established in cases where the worker claims to be discriminated against and the employer does not present a transparent remuneration policy that demonstrates that the alleged differences are based on objective criteria. Experts from Belgium, Greece, Italy, the Netherlands and the UK report that data or statistics can be used as evidence in court. The use of data and statistics can facilitate the establishment of discrimination, in particular in cases of indirect discrimination or in cases where reference is made to a hypothetical comparator. However, there is a lack of clarity on whether or not statistical data to establish pay discrimination can be used in the courts across the EU. Moreover, even if such data and statistics are accepted as evidence, such data and statistics may not exist and, even if they do exist, workers usually do not have easy access to them. Workers usually also have no access to experts or technical studies on the equality and value of the work concerned that would make comparisons across the board. The support and expertise of NGOs, trade unions and equality bodies in litigation in these cases can be crucial. One way to establish the presumption of discrimination is by identifying a comparator. However, as mentioned above, this may be very challenging. Issues with providing evidence about a comparator have been reported in 14 Member States (BE, CY, CZ, DK, EE, EL, FI, HR, IE, LT, LU, NL, SI, UK). In Member States where pay discrimination is a criminal offence (BE, CY, FI, LT, MT), the difficulty in gathering the evidence necessary to establish a prima facie case of discrimination may be mitigated by the fact that the public prosecutor has the power to investigate and gather elements to establish a discrimination case before the criminal courts. Evidence gathered in this way may usually be used by the victim in subsequent/parallel civil proceedings. However, according to stakeholders interviewed by national experts, criminal investigations are rare in cases of alleged pay discrimination, probably because the scarce public resources to investigate criminal offences can only be made available when there are sufficient elements pointing to a criminal offence in the first place, thus creating a vicious circle of lack of evidence. Overall, experts identify applying the rule on the burden of proof as the most problematic provision relating to access to justice: experts from 11 Member States assess it as ‘important’, while experts from another 16 Member States assess it as ‘moderate’.

Protection against dismissal or other adverse treatment (Article 24) The Directive requires Member States to ensure that measures are in place to protect employees against dismissal or other adverse treatment by their employer as a reaction to a complaint within the undertaking or to any legal proceedings related to pay discrimination. National experts involved in the evaluation have not detected any issues regarding the application of this legal provision. Member States have all established a prohibition on dismissal and adverse treatment for workers who file a complaint or action before the courts on equal pay. National legislation provides for sanctions in the form of fines (CY, LT, LV, RO, SI), compensation (AT, BE, DK, EE, EL, FI, IE, LV, MT, NL, SE, UK) or the requirement to reinstate the worker or consider void the dismissal or adverse decision (BE, ES, FR, IE, LU, MT, NL, PL, PT, SK). In some Member States, the victim can only claim this protection before the courts in different proceedings from the ongoing pay discrimination proceedings; in practice this makes the protection far from effective because in order to be protected victims must file a separate, additional claim before a court (BG, CZ, DE, HR, HU, IT). This requires an additional investment of time and costs, which acts as a deterrent for victims to claim their rights. The study and the consultations show that fear of dismissal or adverse treatment remains a significant barrier to seeking redress. 76% of public consultation respondents rate this matter as ‘rather important’ or ‘very important’ (see Annex 2). The relevance of the issue was confirmed by the legal experts pointing to adverse treatment such as harassment or barriers to career advancement being difficult to prove in court. Other barriers to access to justice Further barriers to access to justice mentioned by legal experts and stakeholders include: ·costs of proceedings, with legal aid only available to (very) low income earners: in some countries (e.g. AT, BG, SE) the losing party also bears the costs of the winning party, making the stakes of pursuing litigation very high; ·lack of courts’ expertise on the legal framework for gender pay discrimination; ·low social awareness among victims of pay discrimination and lack of pay transparency; ·length and complexity of the proceedings linked to difficulties in proving discrimination and in finding the required comparator. Conclusion on the effectiveness of EU action in ensuring access to justice for victims of pay discrimination The legal protection provided for in Articles 17 through 19 and 24 of the Directive is considered very important in ensuring proper enforcement of the equal pay principle. However, in practice, it seems that those seeking redress in cases of alleged pay discrimination continue to face substantial barriers. Around 60% of respondents in the public consultation (Annex 2) rate all factors listed in Table 2 of the Annex 2 as ‘rather important’ or ‘very important’. The most relevant issues mentioned are the fear of professional consequences (76%), the length and costs of litigation (81%), and the problems relating to the burden of proof. The literature review confirms that very few claims of gender pay discrimination reach the national courts. This is also reflected in the legal research carried out in the support study, which identified only a few national cases in Cyprus, Finland, Germany, Greece, Malta and the UK. The research also points to a lack of expertise on EU anti-discrimination law, including issues of equal pay, among judicial authorities at national and regional level. In a European Trade Union Confederation (ETUC) survey carried out in 2019, most confederations (20 out of 38) reported that no information on the number of cases was available, and 10 reported that they did not know or did not consider the issue to be relevant. Only eight confederations confirmed the existence of statistics, but considered the number of cases ‘very low’ or ‘somewhat low’ compared to the scale of the issue. 5.1.3. Effectiveness of action in terms of monitoring and enforcement Effective, proportionate and dissuasive penalties (Article 25) Under the Directive, Member States must lay down penalties for infringements of national provisions adopted pursuant to the Directive and should take measures necessary to ensure that they are applied. The Directive allows for penalties to comprise the payment of compensation to the victim. In any case, penalties must be effective, proportionate and dissuasive. Nine Member States (AT, DE, DK, EE, HR, NL, PL, PT, SE) limit penalties to compensation awarded by courts. In these Member States, the burden of enforcing the principle of equal pay therefore rests on victims who need to take action before the courts. Considering the barriers to access to justice mentioned above, it is doubtful that compensation awards alone qualify as an effective form of penalty, especially since compensation and penalties are regulated by two separate articles of the Directives (Article 18 and 25 respectively). It is equally doubtful that compensation awards qualify as dissuasive penalties, considering the reported generally low level of compensation awarded by courts. 19 other Member States have established specific penalties in addition to compensation. The most common penalties are of an administrative nature (BG, CZ, EL, ES, FI, FR, HU, IT, LT, LU, LV, RO, SI, SK, EE) and are usually ordered by the national labour inspectorate or equality body. Other measures are of a criminal nature (BE, CY, FI, LT, MT): they include fines or even imprisonment. Other penalties include the publication of the decision concerning the pay discrimination (HU, IE, RO), the loss of subsidies by the defendant company/employer (ES, IT) and pay audits (IE, UK).

Criminal penalties may appear more dissuasive and effective than administrative ones, but they require potentially lengthier criminal proceedings. In Belgium, the equality body, Unia, actually suggested that it would be better to reintroduce administrative fines. This happened, for instance, in Italy, where criminal penalties were replaced by administrative penalties in 2016, with higher efficiency in the sanctioning procedure. Penalties are generally applied through administrative means (labour inspectorates), quasi-judicial means (equality bodies) or judicial means (courts). Labour inspectorates and equality bodies In most Member States (BE, CZ, CY, EE, EL, FR, LU, ES, LT, LV, MT, PL, RO, SI, SK, PT), the labour inspectorates have a formal role in enforcing equal pay provisions. Gender-based pay discrimination is, however, not their core business, and labour inspectors are not necessarily trained to identify such discrimination in the first place. Several experts (BE, CZ, EL, HU) pointed out that labour inspectors only investigate following a complaint from workers or a warning from the national equality body. Country experts from SI, LU and FR also reported that the principal barrier to efficient enforcement of the equal pay principle by labour inspectors stems from the lack of human resources. As for equality bodies, all Member States have established at least one. Their core purpose is to implement equal treatment legislation generally. Article 20 of the Directive mandates them to provide assistance to victims of discrimination in pursuing their complaints, to conduct independent surveys and to publish independent reports that make recommendations on issues relating to discrimination. The freedom the Directive gives to Member States to decide on equality bodies’ mandate and level of responsibilities has led to a wide diversity in the bodies’ competences and powers, financial support and structure. In many Member States, equality bodies assist alleged victims in bringing their claims before the courts (BE, BG, DE, ES, FI, HR, IE, IT, MT, PT, SI, SK, UK) or may bring claims on their behalf (BE, IE, IT, LV, PL, SE, SI, SK). Certain Member States entrust equality bodies with quasi-judicial competences. In these cases, the equality body can grant compensation to victims directly (DK), sanction perpetrators through administrative and/or criminal sanctions (BG, HU, RO), or resolve discrimination disputes by taking binding decisions (CY, EE, FI). Most national equality bodies have also a non-judicial enforcement role. Non-judicial activities include the competence to engage in alternative dispute resolution (‘out-of-court procedures’ such as mediation) and to provide legal non-binding opinions/recommendations. In addition, equality bodies’ mandates include other types of assistance to victims, as well as the promotion and support of gender equality rights. The number of complaints or cases on equal pay brought before equality bodies varies across the EU and tends to be low (Austria has the highest number of such cases, ranging from 58 to 110 per year). Reasons mentioned for the low number of cases are the fact that victims lack of awareness of the equality body’s competences or even of its existence (LU, DE, EE) and a more general lack of awareness of the rights relating to equal pay (BE). To ensure the independence and effectiveness of national equality bodies, the European Commission adopted a recommendation on standards for equality bodies in June 2018. This legal act sets minimum standards concerning the mandate of equality bodies, their independence, their effectiveness (including sufficient resources and appropriate powers) and the national institutional architecture for equality. 5.1.4. Effectiveness of action to tackle occupational segregation Gender-neutral job evaluation and classification systems help tackle occupational segregation by elucidating the true value of different jobs, skills, experiences and responsibilities. They detect indirect pay discrimination related to the undervaluation of jobs (typically done by women) by measuring and comparing jobs whose content is different but of equal value. In this way, they support a transparent pay system and enhance clarity on what is considered work of equal value, thus contributing to reducing the gender pay gap. Article 4 of the Directive provides that when job classification systems are used to determine pay, they must be based on the same criteria for men and women and must be drawn up to exclude any discrimination on the grounds of sex. The Pay Transparency Recommendation tries to reinforce and extend this provision by inviting Member States to promote and develop such systems, including in their capacity as employers in the public sector, to prevent or identify and tackle possible pay discrimination based on gender-biased pay scales. Member States are specifically invited to encourage employers and social partners to introduce gender-neutral job evaluation and classification systems. In doing so, Member States could draw inspiration from Annex 1 to the Commission staff working document accompanying the report on the application of Directive 2006/54/EC. The Recommendation introduced the additional term ‘job evaluation systems’ as a new concept in the EU legal framework, besides job classification systems. The concept of job evaluation systems is a broader term and considered more effective. Both job evaluation and job classification systems must be ‘gender neutral’. Since 2006, 14 Member States (BE, CY, DE, EL, ES, FR, IT, LT, MT, PT, SE, SI, SK, UK) have introduced the obligation that job classification or evaluation systems must be gender neutral. Overall, the use of job evaluations and classifications as part of wage determination is generally limited in the private sector. The network of legal experts in the EU reports the common use of job evaluation or classification systems in only 8 countries (FI, FR, DE, IT, NL, LU, BE, UK). National experts involved in the evaluation underline that these schemes seem more common in larger companies, or in companies under collective agreements (CZ and LU). Promotion of job classification by social partners and employers Some Member States (BE, FR, LU) have included an obligation for social partners to negotiate on equal pay, including the requirement to establish job classification/evaluation systems. However, this obligation is not always applied in practice. In Luxembourg, for instance, collective agreements simply mention that equal pay has been discussed. The main obstacle to effective negotiation of job classification systems by social partners lies in the absence of monitoring by the authorities. A good example of negotiation by social partners is the adoption in Belgium of Collective Agreement No 25, as amended most recently in 2008, which provides that enterprises and joint sector committees must assess whether their job evaluation systems and pay classification schemes are gender neutral and amend them when necessary. The agreement required all companies and sectors to assess and ensure the gender neutrality of job classification and evaluation systems. The collective agreement defines the notion of pay and establishes a special committee competent to advise courts on equal pay. To ensure proper implementation, the legislation established a close monitoring system. The Joint Committee in charge of concluding the agreement must have ensured the gender neutrality of the evaluation and classification system before the mandatory submission of collective agreement to the Ministry of Employment. The ministry rates the monitoring system using a 12-point screening tool and can suggest changes or deny approval if the function title is not neutral e.g. if it is expressed with the feminine or masculine form. This was the case for 45 out of 255 job classifications. After resubmission in the 2 years allowed, 12 were still found to be non-gender neutral and are being renegotiated. The initiative as a whole was very successful in bringing awareness of stereotypes in job classifications, which eventually helped to have more analytical classifications and increased the status and value of sectors in which a high proportion of workers are women. In 2010, the Institute for the Equality of Women and Men (part of the national government) developed and published a checklist to help design gender-neutral job evaluation and classification systems. Despite this comprehensive framework, the study shows that the implementation of the obligation varies substantially from one sector to the other. Training programmes to assist employers in implementing gender-neutral job evaluation and classification systems are reported to exist in some Member States (BE, CY, EE, LU, SE). Other Member States (AT, BG, BE, EE, FR, NL, PT, SE, LU and UK) have drawn up guides and checklists for job evaluation and classification that make it possible to avoid gender bias. For instance, in France, the equality body (le Défenseur des droits) published a guide on gender-neutral job classification in 2013 to promote effective implementation in collective bargaining procedures at sector and company levels. The Higher Council for Employment Equality and social partners then developed a guide listing the parameters that ensure job classifications are gender neutral. The guide is now the point of reference for collective bargaining procedures at the sectoral and company levels, and trade unions have referenced it in publications about reducing the gender pay gap.

National experts report a lack of promotion and monitoring of gender-neutral job evaluation/classification systems in a number of Member States (AT, BG, CZ, DK, EE, EL, IT, MT, LT, LV). In some Member States (AT, BG, DK, LT and LV), experts have not found any evidence that private sector employers currently use a gender-neutral job evaluation or classification system. Even where systems exist, they are often based on traditional, non-transparent criteria, resulting in the under-classification of predominantly female categories and making indirect discrimination very probable (this is the case in countries such as EL and HR). The national research identified several reasons underlying the challenges faced in implementing gender-neutral job classification/evaluation systems. For example, trade union delegates do not always have the knowledge and expertise to negotiate on gender-neutral job classification systems (this was identified as an issue in France and Bulgaria in particular). In some countries, there is a lack of awareness of the systems’ purpose and added value. A way to tackle this issue is through training (BE, EE, CY, LU and SE) and guidance. Even in cases where gender-neutral job classification systems must be negotiated by social partners, the absence of monitoring affects the systems’ implementation, as was noted particularly for Luxembourg. In Estonia, the development of gender-neutral job classification/evaluation systems is not on a priority for trade unions. In several Member States, a review of existing systems is needed to remove traditional, non-transparent criteria which are not gender neutral and thus reinforce segregation and inequality in pay. 5.1.5. Effectiveness of the Pay Transparency Recommendation The lack of pay transparency contributes to scarce awareness of actual and existing pay discrimination and represents an obstacle for victims to claim equal pay. As outlined in Section 2.1, the 2014 Recommendation proposed four main measures for employees, employers and public authorities to uncover unjustified wage inequalities within organisations. The pay reporting and pay audit measures proposed in the Recommendation depend on the size of the company: over 50 employees for pay reporting and over 250 for pay audits. The threshold is important because a lower employee threshold leads to greater coverage of the workforce and, consequently, more potential to identify opportunities to eliminate gender pay discrimination. For example, the threshold of 250 employees in the UK implies that less than half of UK workers are covered by the legislation. The employee threshold applied varies across the 13 Member States that had pay reporting or pay audit measures in place by December 2018, ranging from less than 50 (DK, FI, LT, PT, SE) to 250 and more (UK, DE). As mentioned, there was limited follow-up by Member States (See Table 2 ) to the four main measures that are the focus of this evaluation in addition to the Directive. Enforcement mechanisms and compliance of pay transparency measures in Member States Strong enforcement mechanisms should lead to higher levels of compliance and more widespread application of the legislation. In 11 Member States (AT, BE, DK, DE, ES, FI, FR, IT, PT, SE, UK), pay transparency measures are mandatory. Enforcement mechanism and/or sanctions in place are fines (BE, DK, FI, FR, IT, LT, PT, SE and UK) and a ban on public benefits (PT, IT). Information about the actual level of enforcement is, however, scarce. In Sweden, three employers were fined for non-compliance with the pay audit requirements, with the penalties ranging from €9,400 to €188,000. In the UK, the Gender Pay Gap Information Regulations mention a fine for companies not complying with the legislation, but do not provide a figure. The level of compliance also varies substantially. It appears to be higher in Sweden, the UK and Finland. For the UK, almost all firms to which the regulations apply (i.e. those with more than 250 employees) comply with the legislation. In Sweden, the compliance rate has increased over time and reached high levels in recent years. In 2008, only 48% of employers complied with the legislation. By 2016, an estimated 7 out of 10 companies applied the pay transparency regulation and about a quarter of employers did not comply with the pay audit measure. In Finland, an estimated 60% of companies complied with the measure in 2008-2009, increasing to 50-66%. In other Member States, compliance with pay transparency measures is quite low. In Germany, low compliance seems to be related to low awareness of the legislation among employers. A survey of 2,300 German companies revealed that 74% of companies with 500 employees were not aware of the existence of the Pay Transparency Act and only a minority of companies (12%) are reviewing their pay structures to make them more transparent. Another survey of companies reports that 16% of employers had employees asking for pay information. In France, figures for 2019 show that only 50% of employers legally bound to pay transparency measures had actually published their gender equality index on time. Belgium does not appear to have a record of the number of companies that actually submit pay reports. In Austria, the level of compliance in preparing income reports was higher among larger companies. It was also found to increase over time. Disclosure of pay reports and pay audits The Recommendation suggests that employers should regularly inform employees, workers’ representatives and social partners of pay reports. In addition, the results of pay audits should be made available to workers’ representatives and social partners upon request. The results of the first empirical study on the impact of mandatory wage transparency suggest that disclosing gender disparities in pay can have some effect in narrowing the gender wage gap at company level. Moreover, disclosure seems to have a positive impact on the number of women hired and their career progression. At the same time, the overall wage cost for companies has not increased as the growth of men’s wages slowed down. The study analysed companies’ wage statistics before and after the introduction of the 2006 Act on gender-specific pay statistics in Denmark. It compared companies with 35-50 employees (who had to report their wage gaps) to data of a group of similar-sized firms with 25-34 employees. It appears that from 2003 to 2008, the gender pay gap in the first group of companies declined by 7% relative to the pre-treatment mean, from 18.9% to 17.5% against a steady 18.9% in the other group. A 7% reduction in the pay-gap should be considered as a significant effect. Only a limited number of firms in Denmark are governed by this legislation and the study also proves the effect amongst firms, that were not required to provide gender segregated pay-statistics. These findings suggest that the obligation to provide information on the gender pay gap can be an effective step towards addressing gender wage disparities. The salary growth for men in the companies bound by the obligation increased less than in the companies not required to report the data and the overall wage bill at the end of the observation period was therefore 2.8% lower. These lower wage costs for companies might compensate for the potential loss related to an observed decline in productivity of 2.5%, suggesting overall that fears from companies on the costs of these measures are not justified (see also Section 5.3). It is not possible to generalise these results, which are specific to Danish experience. However, since Denmark already had a strong record of supporting women in the workforce, it is possible that a mandatory wage transparency reform would have a even larger effect on the gender wage gap in less egalitarian countries. In practice, the disclosure of pay reports and pay audits varies by Member State. In Austria, an estimated one third of works councils were reported to have held company meetings, typically at their own request. However, awareness of pay reports among employees was still low. In Denmark, less than half of employee representatives (42%) reported receiving pay reports from companies. In Finland, an estimated 35-40% of employees reported that the pay audit results were available online. In Belgium, pay reports from employers are only submitted to the works council. No information is available on the extent to which this obligation is respected, as for confidentiality reasons neither the equality body nor any other government body can monitor it. It is unclear if employers discuss the reports in works councils and adopt corrective measures as a result. By contrast, the UK and France publish the results more widely, making the threat of reputational damage more credible and therefore more effective. In the UK, where the pay report is published on the employer’s and the government’s website, there was 100% compliance in the first year of reporting. Though the level of compliance was lower in France (about 50%), an estimated 94% of employers changed their internal company regulations to align them with the equal pay measures. Although it is perhaps too soon to assess the measures’ impact at a higher level, the experiences of the UK and France suggest that the threat to businesses’ reputational capital may be more effective at preventing pay discrimination and ensuring compliance and follow-up than ex post fines or sanctions. Effectiveness in terms of bringing about change in Member States’ legal systems As mentioned in the 2017 report on the implementation of the 2014 Pay Transparency Recommendation, the Recommendation’s impact has remained limited. In 13 Member States (BG, CY, CZ, EE, EL, HR, HU, LV, MT, PL, RO, SI, SK), pay transparency measures are still entirely absent, while two are considering introducing such legislation (IE and NL).

The report noted how secrecy around pay levels makes it difficult to detect discrimination cases. It also found that the limited follow-up to the Recommendation suggested a possible need for further targeted measures at EU level. Measures implemented in Member States vary substantially in their design and implementation. The specific features of the adopted measures have a significant impact on their overall effectiveness, either promoting or hindering their potential to generate benefits. 5.1.6. Effectiveness in terms of the results and impacts achieved As mentioned in Section 2.1, the EU action evaluated builds on already existing legislation and related CJEU case-law. This limits the possibility to attribute results and impacts specifically to the Directive. The specific additional measures brought about by the Recommendation have more potential for being identified as having effects, but these measures can only have a long-term effect on the gender pay gap in combination with other measures. As a consequence, outcomes and impacts are more evident in countries where national transparency measures have been in place for several years and in countries where the level of compliance is relatively high. This section reviews progress made in the EU over the evaluation period, first by drawing on the set of key indicators defined for the baseline (see Section 2.2) and then by investigating the extent to which progress observed can be attributed to EU action. Several studies show evidence that transparency measures are effective. In addition, there is evidence that collective bargaining also has an impact on the gender pay gap, possibly by reducing the risk of discri