2. Gender pay gap reporting in OECD countries: Who reports?
Over half of OECD countries (21 of 38) now require private sector employers to report gender-disaggregated pay information to stakeholders like workers, workers’ representatives, the government, and/or the public. This is a rapidly advancing policy space. Half of the countries with reporting requirements also mandate a more detailed equal pay auditing process, similar to the concept of a joint pay assessment – language used in the EU pay transparency legislation. This requires more thorough analysis and typically mandates follow-up measures to try to close gender gaps. While the same general principles of pay reporting hold across countries, the criteria for which firms must report – such as employee headcount thresholds and worker type – vary across countries. This has implications for the coverage and, consequently, effectiveness of pay reporting policies.
A majority of OECD countries (21 out of 38 countries) require private sector employers to report gender-disaggregated pay data. This is a rapidly advancing policy area. About half of these countries (10 out of 21) have company pay reporting requirements embedded within broader and more comprehensive, mandatory, equal pay auditing or “joint pay assessment” processes.
Most of private sector pay reporting countries (14 out of 21 countries) also apply identical or similar mandatory reporting rules to employers in the public sector. Additionally, Latvia and New Zealand require only public sector employers to report on gendered pay information.
Most private sector pay reporting requirements require employers to report every one to two years.
Countries usually exempt small employers from pay gap reporting rules – meaning a large share of workers face challenges to accessing equal pay information, which limits their ability to argue for fair pay. Spain is the only country where the requirement to collect gender-disaggregated wage data has no minimum firm size threshold. Minimum size thresholds for reporting range from ten employees (Canada and Sweden (see endnote 9)) to more than 518 employees (Israel).
In most countries, pay reporting rules capture the gender pay differentials of the regular and/or permanent workforce. While this means a large share of a firm’s workforce is usually covered by reporting rules, people in more precarious working conditions – such as independent contractors, consultants, and/or temporary workers – may be excluded. Part-time employees are included in the threshold calculations in most countries, although some countries assign part-time workers a smaller weight.
The use of administrative or other pre-collected data presents promising new avenues for pay transparency. It can be difficult for governments or other auditors to identify which firms are required to report. A few countries therefore make use of tax, firm survey, social insurance, or collective bargaining data to identify which firms are required to report, e.g. based on company size.
Policy takeaway: Governments must take a close look at the inclusion criteria for firms and the share of workers in the country covered by pay reporting rules. Adequate reach – including coverage of more precarious workers – is important in ensuring that pay reporting can actually help close gender pay gaps.
More than half of OECD countries now mandate that private sector companies report their gender pay gap.1 55% – 21 of the 38 OECD countries – require certain pre-defined private sector employers to report gender-disaggregated information on pay. These countries include Austria, Australia, Belgium, Canada,2 Chile,3 Denmark, Finland, France, Iceland, Ireland, Israel, Italy, Japan, Korea, Lithuania, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom (Figure 2.1). While the requirement to report pay has been in place for several decades in some countries, like Finland and Sweden, most reporting regulations are fewer than ten years old.
These private sector pay reporting measures are presented in Figure 2.1. Countries are grouped by whether they require private sector pay reporting, equal pay auditing, non-pay reporting, or other related measures. The main features of pay reporting measures in both the private and public sectors are outlined in Table 2.1 below.
Note: Chart shows the distribution of pay reporting measures across OECD countries.
Ten countries in which companies meeting defined criteria (e.g. firm size) are required to carry out regular equal pay audits and report disaggregated pay gaps include: Canada, Finland, France, Iceland, Ireland, Norway, Portugal, Spain, Sweden, and Switzerland (Chapter 4). Eleven countries in which companies meeting defined criteria are required regularly to report gender-disaggregated pay information without a broader audit are: Austria, Australia, Belgium, Chile (the financial sector), Denmark, Israel, Italy, Japan, Korea, Lithuania and the United Kingdom. Countries in which all companies meeting defined criteria are required to report only gender-disaggregated data on workforce characteristics but not gender pay gap data are: Colombia, Germany, Luxembourg, the Netherlands, Slovenia, and the United States. Twelve other countries require the reporting of non-pay information either as part of pay gap reporting requirements or as part of another measure (Chapter 3).
Countries in which an ad hoc selection of companies are required to undergo gender pay audits as part of a targeted labour inspection include Costa Rica, the Czech Republic, Greece, and Türkiye.
Source: OECD Gender Pay Transparency Questionnaire (GPTQ) 2022 (see Annex A).
In almost half (10 of 21) of the countries with private sector pay reporting rules, company pay reporting requirements are embedded within more comprehensive, mandatory, equal pay auditing processes that apply to a pre-defined set of employers (detailed in Chapter 4). Countries with equal pay audits include Canada (under the Pay Equity Act4), Finland, France, Iceland, Ireland, Norway, Portugal, Spain, Sweden, and Switzerland. For definitions and differences between pay gap reporting and equal pay audits see Box 2.1.
Some countries, such as Colombia, Germany, Luxembourg, the Netherlands, and the United States, only require employers to report information other than pay, such as workforce composition, by gender. Colombia and the Netherlands are new countries in this category since 2021. At the same time, non-pay reporting rules complement pay reporting requirements in many countries. Non-pay reporting requirements are discussed in Chapter 3.
A few countries use only an ad hoc approach to pay gap reporting that covers a relatively small share of employers. For example, in countries including Costa Rica, the Czech Republic, Greece, and Türkiye, companies targeted for labour inspections are also sometimes required to undergo gender pay gap reporting. These countries do not have more systematic, mandatory pay gap reporting rules.
Finally, in a few countries – such as Denmark and the United Kingdom – pay reporting is required, but equal pay audits are voluntary. These voluntary audits are overviewed in Chapter 4.
Pay reporting requires the collection and publication of gender-disaggregated pay information
Gender pay gap reporting refers to public policies mandating that employers regularly collect and report gender pay gap statistics. These statistics are typically reported as the mean/median gender pay gap (difference in pay between men and women), though in some countries the mean/median remuneration of men and women are reported separately. Often reporting rules require that gendered pay information be further disaggregated by groupings like job category, seniority, education, etc (for more see Chapter 3).
Depending on the country, reporting must be shared with employees, workers’ representatives, social partners, a government body, and/or the public (see Chapter 5). Penalties for non-compliance and/or incentives for compliance with reporting rules are also established in pay reporting measures (Chapter 6). To support the reporting process and reduce any administrative burden placed on employers, many national governments have developed practical tools such as gender pay gap calculators and reporting platforms (Chapter 7).
Gender-disaggregated pay reporting seeks to shed light on the presence and size of gender wage gaps, with the goal of reducing them. Pay reporting can help shine a light on inequalities and pressure employers and stakeholders to take action. It can also help individual employees identify potential pay discrimination and take legal action, as it helps to solve the “comparator” issue (Box 2.3). Yet it is important to recognise that pay reporting is not a panacea. There are limits to what it can do and to how much it can help. For instance, burden of identifying, elevating, and arguing for equal pay in individual cases still largely rests on a single worker or their representative (Chapter 1).
Equal pay auditing processes requires a broader analysis and in-depth understanding of gendered pay information
An equal pay audit is a process conducted by an employer or external auditor that should include an analysis of the proportion of women and men in different positions, an analysis of any job evaluation and classification system used, and detailed information on pay and pay differentials on the basis of gender. Equal pay audits represent the most comprehensive government strategy for using pay transparency to address gender wage gaps. Most countries’ pay audit processes mirror the guidelines outlined in the 2014 European Commission Recommendation on Pay Transparency (European Commission, 2014[1]).
These are sometimes called “equal pay surveys” (as in Sweden). In the proposed EU pay transparency legislation, equal pay audits are comparable to what is now called “joint pay assessments” (Box 2.2).
The key characteristic of audits, when compared to simple reporting, is that they attempt to analyse and explain any gender pay gaps found and the status of gender equality (specifically of pay equality) within the organisation. Such analysis may include, for instance, statistical analysis of gender pay gaps among different types of workers, assessments of equal pay for work of equal value, analysis of job classification schemes, as well as analysis of potential direct and/or indirect gender discrimination. This report gives an overview and assesses equal pay audits in Chapter 4.
Upon conclusion of an assessment, equal pay audits often incorporate follow up mechanisms to develop targeted actions on equal pay. In many countries employers must develop strategies to address any gaps found. These may be set up in the form of gender equality or gender pay gap action plans.
2.1.1. Pay reporting regimes are constantly evolving
Although over half of OECD countries now require some form of gender pay gap reporting, these pay transparency measures are still a relatively new policy tool in many OECD countries. Most reporting rules are less than a decade old, although in some countries pay reporting in some form has been a requirement for several decades already, as in Finland and Sweden. Some legislation and amendments were introduced or took effect as recently as 2023 and 2022, e.g. in Australia and Japan (Table 2.1).
In most OECD countries, pay reporting measures have typically been put in place through new legislation or by amending existing legislation. In some countries the requirements are mandated through other measures, such as national action plans, executive orders or via a regulatory body like a labour inspectorate.
Importantly, while the number of countries with any form of pay gap reporting is slowly increasing, countries with existing pay reporting rules are continuously reforming and strengthening these rules. This entails expanding the number of firms that are covered (Section 2.3) or frequency of data reporting (Section 2.4), evaluating the effectiveness of their programme’s design, and/or by strengthening reporting requirements and enforcement (Chapter 6). In short, pay transparency policies are continuously evolving.
2.1.2. Two-thirds of countries with pay reporting in the private sector also require it in the public sector
Among the 21 private sector pay reporting countries, 14 apply identical or similar mandatory reporting rules to employers in the public sector. These include Australia, Austria, Canada (under the Pay Equity Act, see endnote 4), Denmark, Finland, France, Iceland, Israel, Italy, Korea, Lithuania, Norway, Sweden, Switzerland, and the United Kingdom. In most cases, requirements for the public sector correspond to requirements for the private sector. In cases where rules differ, it is often in terms of size requirements. In the remaining countries, only private sector employers are required to report.
Furthermore, Latvia and New Zealand require pay reporting from public sector employers only. New Zealand’s public sector pay gap reporting rules are embedded within wider requirements for employers to conduct equal pay audits and to develop gender pay gap action plans.
2.1.3. Upcoming pay reporting initiatives
Some countries have work in progress to introduce new pay transparency rules or expand the scope of existing measures. Much of this stems from the forthcoming EU Pay Transparency Directive (see Box 2.2), which will come into force in 2023 and apply to all EU member countries.
Nine OECD member countries in the EU (the Czech Republic, Estonia, Greece, Hungary, Luxembourg, the Netherlands, Poland, the Slovak Republic, and Slovenia) will need to implement regulations as they currently have no form of systematic, mandatory private sector pay gap reporting rules. Furthermore, EU countries with existing pay reporting rules might need to amend their legislation to ensure compliance with the planned EU Directive (see Box 2.2). For instance, representatives from France reported that the EU directive may imply changes in the logic of France’s pay reporting if the results are not considered sufficiently disaggregated5. This also means that countries which were already planning to update their legislation are likely to wait for the reporting rules by the EU.
Australia has also made recent changes to its pay gap transparency legislative framework. On 28 November 2022, the Australian Parliament passed a bill requiring the Commonwealth public sector to mandatorily report to Workplace Gender Equality Agency (WGEA), in the same way as the private sector. More recently, on 30 March 2023, the Australian Parliament passed a bill amending employers’ (with 100 or more employees) reporting obligations, to implement, in part or in full, the following recommendations of an earlier review of the Workplace Gender Equality Act 2012:
Recommendation 2 – Publish employer-level gender pay gaps to accelerate action to close them (currently only industry level gender pay gaps are published).
Recommendation 3 – Bridge the “action gap” with new gender equality standards. For instance, employers are required to provide WGEA reports to their governing body. This is intended to increase accountably for taking steps to advance gender equality in the workplace.
Recommendation 5 – Support Respect@Work implementation to prevent and address workplace sex-based harassment and discrimination.
Recommendation 9 – Set up the Workplace Gender Equality Agency (WGEA) for future success to support employers to drive gender equality in Australian workplaces.
General information
The “EU Directive to Strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms”, more commonly referred to as the EU Pay Transparency Directive, proposes a series of EU-level rules for gender pay gap reporting by private sector employers. In its final form1, the EU proposal requires that:
Employers include information about starting pay (can also be a pay range) in the job posting or before the interview. Moreover, employers may not ask potential employees about their previous salary.
Employees have the right to request information from their employer about their individual wage level and about the average wage level, broken down by gender, for categories of employees performing the same work or work of equal value. This right applies to all employees, regardless of the size of the company.
Employers in the public and the private sector with 100 or more employees report on both pay and non-pay information. In an initial phase, employers with at least 250 employees will report every year and employers with 150 to 249 employees will report every three years. Beginning five years after implementation, employers with 100 to 149 employees will also be required to report every three years.
Conduct equal pay audits (or “joint pay assessments,” as they are called in the Directive) under certain conditions. If wage and salary reports reveal a gender wage and salary gap of at least 5% and the employer cannot justify the gap based on objective gender-neutral factors, nor close the gap within a certain time period, employers must conduct a wage and salary evaluation in collaboration with employee representatives.
The proposed Directive and legislation are the result of extensive stakeholder engagement and multilateral negotiations. The European Commission (EC) submitted the Directive to the Council of the EU and the European Parliament (EP) in March 2021. The Council adopted the proposal in December 2021, and, after several improvements, the EP adopted the proposal in April 2022 and entered interinstitutional negotiations between the EP, the Council and the EC began. After reaching a provisional agreement, the legal text was finalised in December 2022 and adopted 30 March 20232. As of now, the Directive is awaiting signature to enter into force3, which is expected to happen in 2023.
This proposal, along with the Work-Life Balance Directive (Directive 2019/1158, 2019[2]), sectoral measures to combat stereotypes and improve gender balance, and a recently (June 2022) adopted regulation on increasing gender balance on the boards of large EU listed firms (Procedure 2012/0299/COD, n.d.[3]) are just a few of the many initiatives that make up EU’s multifaceted strategy to promote gender equality.
Content required in pay reporting
Employers will need to provide the following information:
Mean and median gender pay gap in ordinary basic salary (and separately for complementary or variable components)
Mean gender pay gaps further disaggregated by categories of workers4
Content required in equal pay audits, or “joint pay assessments”
Equal pay audits or joint pay assessments, as they are called in the new Directive, would need to be conducted when a gender pay gap of at least 5% has been detected, this difference has not been justified “by objective and gender-neutral criteria” [Art. 10(1)(a)], and has not been remedied within six months of submission. When required, the assessment should include [Art. 10(2)]:
(a) an analysis of the proportion of female and male workers in each category of workers;
(b) information on average female and male workers’ pay levels and complementary or variable components for each category of workers;
(c) identification of any differences in average pay levels between female and male workers in each category of workers;
(d) the reasons for such differences in average pay levels and objective, gender-neutral justifications, if any, as established jointly by the workers’ representatives and the employer;
(e) the proportion of female and male workers who benefited from any improvement in pay following their return from maternity or paternity leave, parental leave, and carers leave, if such improvement occurred in the category of workers during the period that the leave was taken;
(f) measures to address such differences if they are not justified on the basis of objective and gender-neutral criteria;
(g) an evaluation of the effectiveness of measures mentioned in previous joint pay assessments.
Follow-up mechanisms are also embedded in the proposed directive
In cases of unjustified gender differences, it is required that the employer take affirmative action within a reasonable time, in co-operation with worker representatives, the labour inspectorate and/or the equality body, to resolve the issue. “Such action shall include the analysis of the existing gender-neutral job evaluation and classification systems, or establishment where it’s missing, to ensure that any direct or indirect pay discrimination on grounds of sex is excluded” [Art. 9(4)].
It is further specified that each member state must ensure that there is sufficient monitoring of compliance by designating a body responsible for monitoring and supporting employers as well as making “the necessary arrangements for the proper functioning of such body” [Art. 26(2)].
Content required in non-pay reporting
Employers would also have to report non-pay information, such as the proportion of female and male workers receiving complementary or variable components, and the proportion of female and male workers in each quartile pay band.
← 1. As of 30 March 2023.
← 2. Available at https://www.europarl.europa.eu/doceo/document/TA-9-2023-0091_EN.htmlhttps://www.europarl.europa.eu/RegData/commissions/empl/inag/2022/12-21/CJ21_AG(2022)740543_EN.pdf.
← 3. For detailed information on the negotiations and the legislative schedule, see https://www.europarl.europa.eu/legislative-train/theme-a-new-push-for-european-democracy/file-binding-pay-transparency-measures and https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2021/0050(COD)&l=en.
← 4. Categories of workers defined as “workers performing the same work or work of equal value grouped in a non-arbitrary manner and based on gender neutral criteria referred in Article 4(3) of this Directive, by the workers’ employer and where applicable in co-operation with the worker’s representatives in accordance with the national law and/or practice in each Member State” [Art. 3(1)g]. The criteria specified in Article 4 include skills, effort, responsibility and working conditions, and, if appropriate, any other factors which are relevant to the specific job or position. It is also specified that “these criteria shall also be applied in an objective gender-neutral manner, excluding any direct or indirect discrimination based on sex. In particular, it shall be ensured that relevant soft skills are not undervalued.” (European Parliament, 2022[4])
Source: (European Commission, 2021[5]), Directive of the European Parliament and of the Council to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52021PC0093; (European Parliament, 2022[4]), Provisional agreement resulting from interinstitutional negotiations, https://www.europarl.europa.eu/RegData/commissions/empl/inag/2022/12-21/CJ21_AG(2022)740543_EN.pdf.
Most countries require private sector employers to carry out pay reporting annually (Table 2.1). In a few countries, reporting must take place every two years – except for Iceland (every three years) and Switzerland (every four years). Switzerland is a special case where employers must report on pay information once, and if equal pay requirements are met, they are exempt from future reporting (the prevalence of once-and-done assessments is not assessed). Otherwise, employers are required to report every four years. Although the law does not appear to provide clear criteria for when a pay equality is achieved, i.e. whether the equal pay requirements are met, in practice the pay gap must not be statistically significantly greater than 5%, when conducting the analysis with Logib (see Chapter 7 for more information).
In some countries, legislation differentiates between pay reporting and equal pay audits by permitting varying time intervals for the two. In Canada, under the Pay Equity Act reporting system (see endnote 4), employers must report on pay annually but have to conduct equal pay audits only every five years. Similarly in Spain, pay reporting, i.e. the collection of pay registries, must take place every year while the required frequency for equal pay audits is linked to the schedule in the company’s equality plan (see Table 2.1).
Despite the growing use of pay transparency rules across countries, the coverage and likely effectiveness of pay gap reporting rules depend on their design. The share of workers who are covered by pay gap reporting is determined by institutional rules such as minimum company size requirements for reporting, work hours of the employee (e.g. part-time versus full-time), and a workers’ employment contract status (e.g. temporary versus permanent) (see Table 2.2). This leaves sizeable gaps in the share of workers who have access to important information about the fairness of their pay.
In many countries the workers included in size calculations are the same for which gender pay information must be calculated for (e.g. Australia, Austria, Denmark, Finland, Korea, Lithuania, Norway, and Spain). In some countries there are slight differences between the two groups of employees. In Belgium, temporary workers are considered employees of the temporary worker agency, so their wage data are not included in the user company’s6 wage gap report. However, they are taken into account to some extent when making headcount calculations for the user company. In Japan, only the number of regular workers is used to assess the company’s size, however, when calculating the wage gap between men and women, all workers, including fixed-term employees employed for less than one year, are generally included. In Canada, temporary employees’ pay is included in pay gap calculations only if they constituted 20% of the employer’s workforce at any time during the calendar year.
2.3.1. Small employers are usually excluded from pay reporting requirements
Reporting requirements usually include minimum size considerations for firms. Only two countries require all firms with employees to report pay information. In Spain, all firms, with no minimum size threshold, are required to collect gender-disaggregated wage data that employees can access.7 In Portugal, all firms with at least one employee must submit to the Ministry of Labour the Single Report8 containing, among other things, gender-disaggregated wage data.
Firm size minima otherwise range from ten employees or more (Canada, for a subset of employers under the Pay Equity Act, see endnote 4, and Sweden9) to 518 employees (Israel). Firm coverage can be grouped as following:
Micro- and small10 firms with under 50 employees are included in private sector pay reporting requirements in Canada (for a subset of employers under the Pay Equity Act), Denmark, Finland, Iceland, Lithuania, Portugal, Spain and Sweden. Firms with 50 employees and larger are also included.
Medium-sized firms with 50 to 249 employees (see endnote 10) and larger are covered by private sector pay reporting requirements in almost all countries, with the following exceptions that only cover large firms:
Only large firms are subject to private sector pay reporting requirements in Ireland (250 employees minimum), Israel (518 minimum), Japan (301 minimum), Korea (500 minimum [300 or more full-time employees for companies that are obliged to provide disclosure in accordance with Article 14 of Monopoly Regulation and Fair-Trade Act]), and the United Kingdom (250 minimum).
Firm size also defines the type of reporting required of employers, rather than simply whether or not reporting is required. For instance, in Sweden all public and private sector employers are required to assess their gender pay gaps, but only employers with ten or more employees need to document their work. Similarly, in Belgium, France, and Spain employers with 100, 250, and 50 employees or more, respectively, must report more detailed pay information than employers with fewer employees.
2.3.2. In most OECD countries, only the pay of regular and/or permanent workers is included
The question of “who counts?” in determining whether a company is subject to reporting rules also varies by country. These rules – taken from country responses to the Gender Pay Transparency Questionnaire 2022 – are presented in Table 2.2.
The most comprehensive inclusion criteria for headcounts, i.e. where the most workers are considered for the analysis, are in the following countries:
All employees under employment contract or to whom the employer has a formal employer responsibility are included in Austria, Belgium, Norway, Spain, Switzerland, and the United Kingdom;
All paid employees in Australia, Denmark, Finland, Iceland, Lithuania, and Sweden.
Many countries have carve-outs for temporary and indirectly employed workers
Temporary agency work involves a triangular work relationship where the agency worker has a contract of employment with a temporary work agency and is assigned to work temporarily under the supervision and direction of user undertakings. The pay of agency workers is set based on the pay levels at the user undertaking, unless a collective labour agreement of the agency work sector defines pay and working conditions (World Employment Confederation, 2021[6]).
Many countries do not require companies to count indirectly employed workers, e.g. Italy and Korea, including independent contractors and/or consultants as in Iceland, Spain, Norway, and Portugal. Another way of making the distinction between the more permanent workforce and temporary workers is to simply exclude temporary workers from the calculations (e.g. in Austria) or to apply a minimum of time of employment. The latter is the case in Canada and Japan, where those employed for less than one year are excluded.
In Japan, only “regular” employees are included in the calculations. This is a subset of relatively privileged workers who are employed on indefinite terms without specific job obligations and are strongly protected from firings and layoffs. Non-regular workers – including many full-time employees – have fixed-term contracts with specific job obligations. They are included in the size threshold calculation only if employed for one or more year in the past or in the future. The distinction is important considering that a disproportionately large share of women are non-regular employees when compared to men (Yamaguchi, 2019[7]) – it suggests many women may not be covered by Japan’s new gender pay gap reporting rules.
In Belgium, for the calculation of the threshold of 50 employees, the employer’s temporary employees only count for a fourth of the reference period for which the calculation is made. In Spain every hundred days worked by a temporary worker11 in a year is calculated as one more employee in the total headcount.
In France, the following employees are included in proportion to their time of presence during the last year: employees holding a fixed-term or an intermittent employment contract, employees made available to the company by an external company who are present on the premises of the user company and have been working there for at least one year, and temporary employees. However, employees holding a fixed-term employment contract and agency workers, including temporary employees, are excluded from the headcount when they replace an employee who is absent or whose employment contract has been suspended, in particular because of maternity leave, adoption leave or parental leave. This is a relatively complicated construction of inclusion criteria for firms.
In EU legislation, the contracting company is legally liable for ensuring equal pay between men and women among their agency workers. In response to the challenges faced by temporary worker agencies in ensuring pay transparency and equal pay between men and women due to their dependence on user companies for pay information, some representatives of temporary worker agencies suggest that there should be a formal obligation for user companies to provide this information to temporary work agencies (see endnote 6) (World Employment Confederation, 2021[6]). Additionally, they call for special rules for very short labour contracts and assignments of agency workers due to the temporary and changing nature of agency work, with workers changing jobs and places of work more frequently than other workers. For very short assignments, agency workers do not fully integrate into the working population at the user undertaking, justifying a special rule for these contracts and assignments (World Employment Confederation, 2021[6]).
Some countries have special provisions for part-time workers
Women make up a high share of part-time workers (OECD, 2019[8]), and any efforts to close the gender wage gap must consider how to incorporate this group in pay transparency efforts. In some countries part-time workers are counted as an additional worker regardless of the length of their working day (e.g. Spain).
A number of countries specify different computation rules for part-time workers than for full-time workers. Some countries use approaches that could diminish the effects of part-time workers’ pay on the total estimates. For example, in Belgium part-time workers, i.e. those working at less than 75% of full-time, only count as 50% in the total headcount. In France, part-time employees, whatever the nature of their employment contract, are taken into account by dividing the total sum of the hours recorded in their employment contracts by the legal working time or the agreed working time.
Other countries have a more proactive approach by weighting part-time workers to equal full-time workers. For instance, in Austria the income of part-time employees is to be extrapolated to full-time employment and that of employees employed during the year to annual employment.
Other exclusions from pay reporting
Interestingly, in Lithuania employees in managerial positions are excluded due to privacy concerns and to keep average salaries more representative. The idea here is that salaries on managerial staff are likely to skew averages upwards giving an unrealistic estimation of the workers’ salaries. Indeed, while the exclusion of managerial positions from salary reporting may help to provide a more accurate representation of the salaries of non-managerial workers, it may also conceal significant income disparities between those in top-level management and other employees. In Canada, students are excluded from headcounts, and in France and Switzerland, apprentices are excluded.
2.3.3. Other criteria for determining duty to report
Beyond sector or size requirements, some countries employ other criteria to determine relevant employers (Table 2.2). Reporting requirements only apply to a subsection of the private sector in Canada and Chile, for instance. In Chile only entities supervised by the Financial Market Commission (see endnote 3) must report, while in Canada only federally regulated entities (both in public and private sectors, although they are mostly found in the public sector) must report.
In Norway, while the minimum headcount threshold is 50 employees, the law guarantees that the same reporting requirements also apply to private undertakings that ordinarily employ between 20 and 50 persons if requested by the employees or employee representatives.
Finally, some countries exclude certain industries. For example, in Denmark reporting requirements do not apply to employers in the industries of agriculture, horticulture, forestry and fishing.
2.3.4. Many workers are not covered by pay reporting rules
Despite the growing requirements of pay gap reporting by mid-size and large firms – both over time and in terms of minimum employee thresholds – the current designs of most systems leave serious gaps coverage even in countries with pay reporting rules in place.
Workers in small businesses are missed
First, only three countries require micro companies (less than ten employees, see endnote 10) to assess pay gap information (see endnote 9) – and even in those cases the policy reach is limited. In Spain, only employees can access the information, through the legal representation of workers in the company (see endnote 7), and in Portugal access to the information is limited to the company itself and the labour inspectorate (see endnote 8). In Sweden, information is not required in writing if there are fewer than ten employees (see endnote 9).
Many countries are reluctant to include micro-enterprises as, in practice, it is difficult to ensure worker anonymity and confidentiality in workplaces with so few employees. This is even more challenging if there is an imbalance in the number of male and female employees. Administrative burden is also cited as a reason to not include small employers, although considerable research contradicts this claim (European Commission, 2021[5]; Aumayr-Pintar, 2020[9]; OECD, 2021[10]).
Yet the great majority of firms worldwide (between 70% and 95%) are micro-businesses (OECD, 2017[11]), and almost half of these have at least one employee (OECD, 2020[12]). The lack of pay gap analysis and reporting for these firms therefore means that a large share of workers face challenges to accessing equal pay information, and in some cases, to earning fair pay for their work.
Companies with low shares of men or women employees are sometimes excluded
Second, some countries have carved out exceptions from pay gap reporting for employers that have a large imbalance in the number of women and men workers, as gender gap estimates produced on a small sample for one group may be misleading. This is especially challenging in countries where the pay reporting rules require a relatively high degree of disaggregation by job category.
In France, for example – which has one of the most sophisticated pay reporting frameworks in the OECD – many employers are excluded from reporting pay gaps for certain job categories because there are so few women (or men) in certain jobs. This is especially an issue among French small and medium enterprises (SMEs); in 2020 45% of firms with 50 to 250 employees had incalculable Professional Equality Index12 scores (Briard, Meluzzi and Ruault, 2021[13]).
Denmark, too – despite having a fairly efficient and inclusive pay reporting regime – acknowledges the limitations around pay gap reporting when there is an unequal distribution of male and female workers. Danish regulations specify that there should be at least ten workers from each gender in same work function in order to carry out a pay gap analysis. And New Zealand’s public sector regulations do not consider gender pay gaps statistically robust for groups of fewer than 20 men and 20 women.
An issue with excluding companies with gender imbalance from reporting relates back to the issue of horizontal segregation. Roles that are either male or female-dominated tend to be characterised by inflated or depressed wages (Bettio, Verashchagina and Camilleri-Cassar, 2009[14]). At the same time, presenting gender pay gap information in highly segregated roles without information on actual pay amounts can also hide important trends: female-dominated roles may be characterised by low gaps even though actual pay amounts are low compared to male-dominated roles. In these cases, presenting mean or median gender-disaggregated pay would be more useful than presenting gaps – which may appear small in the presence of low wages overall.
For an individual worker, remedying unfair pay requires knowing how much a comparable colleague earns. A few OECD countries have given private sector employees the right to request the salary information of comparable colleagues, but usually under limited conditions.
A few countries facilitate the disclosure of comparators’ pay in discrimination cases.
Some countries facilitate salary comparisons when an employee is seeking recourse against possible discrimination. Ireland, for example, allows workers with discrimination complaints to request pay information on colleagues. While employers are not required to reply, the Workplace Relations Commission (which hears and decides complaints of discrimination under the Employment Equality Act) may intervene if an employer does not reply or provides false information.
In Austria, when examining whether pay discrimination has occurred in a specific case, the court or the Equal Treatment Commission will request that an employer disclose the pay structure of the company (insofar as needed for the specific case) as well as the pay of comparable workers. However, there is no explicit legal basis for this; this procedure results from the need to be able to verify the alleged discrimination. If the employer does not comply with this request, this circumstance is subject to an assessment of evidence. In proceedings before Austria’s Equal Treatment Commission, income data on comparable workers may be requested from the relevant social insurance institution.
Norway allows workers (in both the private and public sector) who suspects pay discrimination to demand their employer’s written confirmation of the pay level and the criteria of setting pay for the person or persons with whom the worker is making a comparison. Furthermore, employees in the companies that carry out salary mapping must have a real opportunity to compare their salary with the average at their level1. The recipient of the disclosed information is often required to sign a confidentiality declaration. Workers, their representatives, the Anti-Discrimination Tribunal, the Equality and Anti-discrimination Ombudsman, and researchers have a right to the disclosure of the results of a pay review. In previous years, Norwegians’ individual tax records were published online and available to the public, but due to privacy issues this wage data disclosure has been tightened.
Chile and Germany require companies to share a group of comparators’ pay.
Other countries require companies to share comparator pay information for a group of comparators, not an individual comparator. In Chile, a union may request (on behalf of an employee) salary information as long as there are five or more workers in the relevant position or function. In Germany, upon an employee’s request, firms with at least 200 employees are required to name a similar activity (or one of equal value) and share the pay information from a group of at least six employees.
The existence of these measures does not guarantee take up. For instance, in Germany, a survey of employers and employees found that an employee’s right to obtain pay information was relatively unknown even among affected workers, and only 4% of employees surveyed in firms with over 200 employees had ever submitted a request to obtain pay information (Government of Germany (BMFSFJ), 2020[15]). Even when an employee is aware of unfair pay, recourse through the judicial system is not always straightforward, as the recent case of a German journalist illustrates (Spiegel, 2022[16]).
Job classification schemes help improve knowledge of comparators’ pay in the public sector.
Job classification systems list pay for different jobs or job classes (Chapter 3). By knowing only a colleague’s job title, one can learn their pay with some accuracy. These are more frequently used in the public sector.
← 1. According to Prop. 63 L 2018– 2019 point 3.7.2.4. (https://www.regjeringen.no/no/dokumenter/prop.-63-l-20182019/id2639399/). Examples of how this can be done is available in the authorities’ online guide at www.bufdir.no/arp (see Chapter 7 for more information).
Source: Adapted from (OECD, 2021[10]), Pay Transparency Tools to Close the Gender Wage Gap, http://oe.cd/pay-transparency-2021
In addition to determining which workers should be counted in minimum company thresholds for reporting, governments also need to define when and where these workers should be counted. This section narrows in on two criteria: the timeframe for counting workers, and how a company’s size is defined vis-à-vis a company’s distribution of worksites within an entire country. Table 2.3 elaborates on country practices based on responses to OECD GPTQ 2022.
2.4.1. Varied used of reference dates to define a company headcount across the OECD
Employer size tends to be computed using employee headcounts over a period corresponding to either the calendar year, financial year, or another reporting period. These reference periods are mandated in Austria, Australia, Belgium, Canada, Iceland, Korea, and Norway.
Other countries have opted to use a snapshot in time: in Ireland, France, Portugal, and the United Kingdom13 employer size is measured in June, March, October, and April, respectively, while in Spain it is measured at least two times a year.
In Canada (under the Employment Equity Act rules, see endnote 4) and Japan, the reference date is the date during the calendar year when the total number of employees is the greatest or once the size threshold has been reached. This should help to ensure the inclusion of the largest number of companies.
Other countries, such as Finland, make no specifications regarding the reference date.
2.4.2. Geographic considerations: Grouping workers across sites to calculate a company total headcount
Geographic considerations come into play when considering which worksites should be included when a firm estimates its headcount.
In many countries, pay reporting requirements consider the company as a whole and require employers to include all workers working in the country (Australia, Austria, Canada under Employment Equity Act, France, Iceland, Italy, Japan, Korea, and Lithuania). In the past, this has helped to account for companies with multiple small physical locations, e.g. retail storefronts in a single company chain. Looking forward, this inclusive definition of company headcount could help to account for workers who are working remotely, away from a company worksite.
Belgium stands out with highly detailed instructions on how to count workers across work sites. According to the Belgian rules, the enterprise must be defined as the technical operating unit, determined based on economic and social criteria (GPTQ, 2022). The technical unit of operation corresponds to the separate offices of an enterprise, provided that these offices are characterised by a certain economic autonomy (a certain independence from the management of the headquarters) and social autonomy. In case of doubt, the social criteria prevail. Examples of social criteria include the diversity of human groups, the distance between centres, the difference in language. Although in most cases the technical operating unit corresponds to the legal entity of the company, this is not necessarily the case (SPF Emploi, Travail et Concertation sociale, n.d.[17]). This can change the count of employers and has the potential to exempt larger employers from reporting, by making their company look like many small sites rather than one large entity. Note, however, that there is a legal presumption on the basis of which several affiliated legal entities constitute a single technical operating unit. Conversely, the law also prohibits the splitting of the same legal entity into several small TEOs that then have fewer than 50 employees and meet the obligations.
When it comes to identifying employers that need to report, based on company size, most countries rely on employers self-identifying.
The self-identification approach likely leads to gaps in implementation of pay reporting rules: some companies may accidentally or intentionally exclude themselves from participating in a pay reporting system, and governments may not be able to identify which companies should be reporting. Although in many countries there are penalties in place for non-compliance with pay reporting rules, enforcement is rarely carried out and financial penalties – when they exist – are usually small (Chapter 6).
A few countries, however, make use of administrative data such as tax or social insurance data to identify relevant employers, and related to this, some use administrative data to calculate or confirm employers’ self-reported pay data.
For instance, the Canadian Labour Program uses data collected under the authority of the Canada Labour Code to identify those employers that are subject to reporting requirements under the Employment Equity Act. In Korea, the Employment Insurance (EI) computing system is used to identify firms that are subject to Affirmative Action (AA).
Belgium uses a different type of pre-existing data to check which companies fall under reporting obligations: they rely on company size information which has already been collected for the organisation of “social elections”.14 Every four years the Federal Ministry for Employment15 updates its own social elections database on the basis of a National Social Security Office (NSSO) database on company characteristics. Note that the size of the company as known in this database is only a first indication that the threshold has been met. On this basis, the Federal Public Service Employment invites the companies concerned to initiate a social election procedure. However, it is up to the parties (the employer in consultation with the unions) to determine every four years what the TOU is and whether the threshold has been achieved within this TOU. In case of disagreement, a judge can intervene.
In Spain, the Labour and Social Security Inspectorate has access to different registers and databases of the Public Administrations, which allows it to obtain relevant information about the active companies, the number of workers employed in them, the forms of recruitment (open-ended, fixed-term, part-time, etc.), the volume of workers employed in a given temporary period or the paid pay concepts. The main access route for this is the information communicated for Social Security purposes. In relation to the equal pay audits (for companies with 50 or more employees), the information available through the register of equality plans is also relevant. Considering all the above, and advanced data crossing techniques, there is a planning work to select those companies in which indications of possible non-compliance with respect to equality are detected, in order to improve the effectiveness and efficiency of the inspection action (see more on enforcement in Chapter 6).
Other countries that report using administrative data to identify affected firms include Italy, Iceland Lithuania, and Portugal.
Two countries – Denmark and Lithuania – use pre-existing data to calculate the gender wage gap for firms, which implies they also identify the firms that need to report. These countries’ practices are detailed in Chapter 7, which presents novel tools for gender pay gap reporting. In Denmark, companies participate in the national Structure of Earnings Survey from which the national statistical office calculates the gender pay gap for firms. The statistical office also has access to wage information from tax authorities which can be used to ensure that the self-registered wage data is accurate. In Lithuania, the social insurance agency uses administrative data to calculate and publish companies’ aggregate gender wage gap to the public (Chapter 7).
A comparator, in the context of equal pay litigation, refers to a worker whose salary is used as a reference for another person who is in a comparable working situation. Guidelines as to who qualifies as a comparator (and whether a comparator is necessary to prove pay discrimination) vary by country. A comparator may be real or hypothetical.
Equal pay for work of equal value implies that women and men should get equal pay if they do identical or similar jobs, and that they should also earn equal pay if they do completely different work that can be shown to be of equal value when based on “objective” criteria. These objective criteria tend to encompass job-related characteristics such as skills, effort, levels of responsibility, working conditions and qualifications. Many countries have attempted to clarify the use of the concept of “work of equal value” in national legislation.
An equal pay audit is a process conducted by an employer or external auditor that should include an analysis of the proportion of women and men in different positions, an analysis of the job evaluation and classification system used, and detailed information on pay and pay differentials on the basis of gender. An equal pay audit is more intensive than simple pay reporting. A pay audit should make an effort to analyse any gender pay gaps found, should attempt to identify the reasons behind these gaps, and could be used to help develop targeted actions on equal pay. An equal pay audit is comparable to a joint pay assessment, as proposed in recent EU pay transparency legislation.
Horizontal segregation refers to the concentration of women and men in different sectors and occupations. For example, women are typically overrepresented in childcare and men are typically overrepresented in engineering.
Job classifications are related to job evaluation process and commonly entail human resource personnel and/or social partners ranking each job within an organisation against objective criteria that relates to the required skills, effort, responsibilities, working conditions, education, and difficulty of a role, amongst other observable characteristics. Related to this, gender-neutral job classification systems refer to job classification systems that account for the gender predominance of a given job class and categorise work based on the same objective criteria for men and women.
The OECD Gender Pay Transparency Questionnaire 2022 (OECD GPTQ 2022, presented in Annex 1) is the reference questionnaire for the policies presented and discussed in this report.
Pay reporting refers to policies mandating that employers regularly report (including to employees, workers’ representatives, social partners, a government body, and/or the public) gender pay gap statistics. Such statistics typically include the average or median remuneration of men and women at the firm level but are often more detailed and include breakdowns by groupings such as job category.
Pay transparency is an umbrella term referring to policy measures that attempt to share pay information in an effort to address gender pay gaps. Such measures may include mandating pay reporting, equal pay auditing, job classification systems, and publishing pay information in job vacancies.
References
[9] Aumayr-Pintar, C. (2020), “Measures to promote gender pay transparency in companies: How much do they cost and what are their benefits and opportunities?”, Eurofound, https://www.eurofound.europa.eu/sites/default/files/wpef20021.pdf.
[14] Bettio, F., A. Verashchagina and F. Camilleri-Cassar (2009), “Gender segregation in the labour market: Root causes, implications and policy responses in the EU”, https://data.europa.eu/doi/10.2767/1063.
[13] Briard, K., F. Meluzzi and M. Ruault (2021), “Index de l’égalité professionnelle : quel bilan depuis son entrée en vigueur ?”, Dares analyses n°068, https://dares.travail-emploi.gouv.fr/sites/default/files/8d521f4e0bfa93883f4127652e4c6f8d/Dares_Analyses_Index-egalite-professionnelle-FH.pdf.
[19] Crenshaw, K. (1989), “Demarginalising the intersection of race and gender: a black feminist critique of antidiscrimination doctrine, feminist theory and antiracist politics”, University of Chicago Legal Forum, Vol. 1/8, pp. 138-167, https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=1052&context=uclf.
[2] Directive 2019/1158 (2019), “On work-life balance for parents and carers”, European Parliament and Council, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32019L1158.
[18] Eurofound (n.d.), Defining “social elections”, https://www.eurofound.europa.eu/efemiredictionary/social-elections (accessed on 27 February 2023).
[5] European Commission (2021), Directive of the European Parliament and of the Council to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms, European Commission, Brussels, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52021PC0093.
[1] European Commission (2014), “Recommendation on strengthening the principle of equal pay between men and women through transparency 2014/124/EU”, Official Journal of the European Union, Vol. 69/112, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014H0124.
[4] European Parliament (2022), Provisional agreement resulting from interinstitutional negotiations, https://www.europarl.europa.eu/RegData/commissions/empl/inag/2022/12-21/CJ21_AG(2022)740543_EN.pdf.
[15] Government of Germany (BMFSFJ) (2020), Report by the Federal Government on the effectiveness of the Act to Promote Transparency in Wage Structures among Women and Men, Federal Ministry for Family Affairs, Senior Citizens, Women and Youth, https://www.bmfsfj.de/bmfsfj/meta/en/publications-en/report-by-the-federal-government-on-the-effectiveness-of-the-act-to-promote-transparency-in-wage-structures-among-women-and-men-148198.
[10] OECD (2021), Pay Transparency Tools to Close the Gender Wage Gap, Gender Equality At Work, OECD Publishing, Paris, https://doi.org/10.1787/eba5b91d-en.
[12] OECD (2020), OECD Structural and Demographic Business Statistics, https://stats.oecd.org/Index.aspx?DataSetCode=SDBS_BDI_ISIC4.
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[11] OECD (2017), “Enterprises by size”, in Entrepreneurship at a Glance 2017, OECD Publishing, Paris, https://doi.org/10.1787/entrepreneur_aag-2017-en.
[3] Procedure 2012/0299/COD (n.d.), “on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures”, European Commission, https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex:52012PC0614.
[17] SPF Emploi, Travail et Concertation sociale (n.d.), “Comité pour la prévention et la protection au travail”, Définition de l’unité technique d’exploitation, https://emploi.belgique.be/fr/themes/concertation-sociale/information-et-consultation-dans-lentreprise/conseil-dentreprise-9 (accessed on 15 December 2022).
[16] Spiegel (2022), Journalistin Birte Meier scheitert mit Verfassungsklage für gleiche Bezahlung, https://www.spiegel.de/karriere/birte-meier-journalistin-scheitert-mit-verfassungsklage-fuer-gleiche-bezahlung-a-c9ec8415-0352-491a-92a1-f4c16372186e.
[6] World Employment Confederation (2021), Technical note for the negotiation on EP compromise amendments.
[7] Yamaguchi, K. (2019), “A lack of gender equality in career opportunity and long work hours perpetuate wage differences between men and women”, Finance and Development Magazine - IMF, https://www.imf.org/en/Publications/fandd/issues/2019/03/gender-equality-in-japan-yamaguchi#:~:text=%E2%80%9CRegular%E2%80%9D%20workers%20in%20Japan%20are%20employed%20on%20indefinite,fulltime%20employees%E2%80%94have%20fixed-term%20contracts%20with%20spe.
Notes
← 1. As of October 2022.
← 2. Pay reporting in Canada applies to federally regulated private- and public-sector employers, parliamentary workplaces, and the Prime Minister’s and ministers’ offices (under the Pay Equity Act). In contrast, pay gap reporting only applies to federally regulated private-sector employers with 100 or more employees, including federally regulated Crown corporations, and other federal organisations (under the Employment Equity Act).
← 3. The pay reporting law in Chile only applies to businesses under the supervision of the Financial Market Commission [Comisión para el Mercado Financiero (CMF)]. The Financial Market Commission (CMF) is a public service of a technical nature whose main objectives are to ensure the proper functioning, development and stability of the financial market, facilitating the participation of market agents and promoting the care of public faith. Companies analyse their gender equality, taking remuneration into account, in order to comply with CMF rules.
← 4. Canada’s pay reporting regulation is two-fold. Pay gap reporting under the Employment Equity Act applies to federally-regulated private-sector employers with 100 or more employees. These employers submit annual reports to the Minister of Labour by 1 June of each year. Conversely, under the Pay Equity Act, federally-regulated employers in both the private (10 employees or more) and public sectors (no employee threshold) are required to submit an annual statement on their pay equity plans to the Pay Equity Commissioner.
← 5. Virtual fact-finding mission between France and the OECD Secretariat.
← 6. For more information about temporary agency work, refer to https://www.ilo.org/sector/activities/topics/temporary-agency-work/lang-en/index.htm.
← 7. All employers in Spain, regardless of size, are obliged to keep a register with the average values of salaries, salary supplements and non-wage payments of its staff, broken down by sex and distributed by professional groups, professional categories, or jobs of equal or equal value. Employees have the right to access, through the legal representation of workers in the company, to the wage register of their company. These registries are not available to the general public.
← 8. In Portugal, all employers with at least one employee must submit the Single Report (Relatório Único) to the Ministry of Labour. This report contains information on the social activity of the company, information on the firm (location, industry, employment, sales, ownership, and legal setting, among other features), and on each of its workers (gender, age, education, skill, occupational category, tenure, wages, hours worked, and more), with the content and deadline for submission regulated by Ministerial Order no. 55/2010, of 21 January. The information contained in the report is included in the Quadros de Pessoal, where information about each individual company is available for consultation only by the respective company itself and the labour inspectorate (Autoridade para as Condicoes do Trabalho (ACT)), for inspection purposes and preventive activities.
← 9. Technically Swedish reporting rules require all employers regardless of size to conduct pay surveys. However, only employers with more than 10 employees need to document their work. As such, ensuring compliance for micro companies is virtually impossible.
← 10. Small and medium-sized enterprises (SMEs) are defined by the number of people they employ: 250 employees or less. SMEs are further subdivided into micro enterprises (fewer than 10 employees), small enterprises (10 to 49 employees), medium-sized enterprises (50 to 249 employees) (OECD, 2017[11]).
← 11. This applies to temporary contracts which, having been in force in the undertaking for the six months prior to the date on which the calculation is made (GPTQ, 2022).
← 12. In France, L’Index de l’Égalité Professionnelle Entre les Femmes et les Hommes, or, in English, the Professional Equality Index (PEI) has been in force since 2019. This measure applies to both employers in the public and in the private sector. Every year, by 1 March, public and private employers with at least 50 employees (requirements differ for those employers with more than 250 employees) must report pay information by gender and carry out and submit the results of an equal pay audit. The French system is further detailed in the subsequent chapters.
← 13. There are different snapshots for the private and the public sectors: private sector – 5 April each year, public sector – 31 March each year.
← 14. These “social elections” are used to elect members of company works councils and workplace health and safety committees. See (Eurofound, n.d.[18]) for an overview.
← 15. This occurs under the Federal Public Service (FPS) Employment, Labour and Social Dialogue.