The Equal Pay Directive – the directive and Norwegian legislation
Through the Equal Pay Directive, the EU has introduced new rules and enforcement tools to counteract pay differences between the sexes. Although Norwegian employers are already bound by the Equality and Anti-Discrimination Act, which, among other things, requires them to work actively with and report on pay and working conditions, the directive will entail more extensive requirements for both procedures and reporting.
The Government has stated that transparency about pay gives employees the opportunity to detect and prove possible differential treatment based on gender. Mapping pay will, at the same time, be able to highlight any imbalances in pay systems and job classification – which in turn may increase awareness and stimulate debate about the causes of structural pay differences between women and men. The Government therefore believes that pay transparency may improve companies’ equality policies and promote closer cooperation between employer and employee representatives.
It is essential to emphasise that the directive does not prohibit different pay where the differences are based on legitimate, gender-neutral and objective assessments. On the other hand, the requirements to ensure that pay determination is not influenced by gender are tightened, and employers must be more aware of how pay is set.
The obligation to report under the Equality and Anti-Discrimination Act applies to enterprises with more than 50 employees. The directive sets the threshold at more than 100 employees, and the requirements are further tightened for larger enterprises. Member States may nevertheless choose to introduce stricter reporting requirements than those laid down in the directive.
The directive has been assessed as relevant for the EEA area and is to be implemented in Norway. The deadline for introducing the rules has been set at 7 June 2026, while the reporting obligation enters into force from June 2027. Since each country may choose stricter rules than those laid down in the directive, it is still uncertain how the Norwegian provisions will be formulated, but it is likely that they will be closely aligned with the content of the directive.
Changes in the employer’s responsibilities – what will be new?
The Equal Pay Directive brings with it several new and stricter requirements compared with the current Norwegian regulatory framework:
- Simplified assessment of work: The directive provides for a simpler process to determine what is considered equal work. In its assessment, the employer must base its assessment on objective factors such as competence, responsibility, seniority, education, quantitative effort and working environment. The concept of pay is expanded to include all forms of remuneration, including bonuses, overtime and pension. As a general rule, equal work shall have equal pay, but it may still be relevant to differentiate between employees who differ in the objective factors.
- Different qualifications may be paid differently: The equal pay requirement means that pay must be based on gender-neutral criteria such as experience and qualifications; accordingly, pay differences that follow from such differences in qualifications are permitted. It is lawful to give higher pay to someone with longer experience than someone with shorter experience. It is only unlawful if the pay difference is due to discriminatory reasons such as, for example, gender, ethnicity or religion.
- More insight and transparency: All employees will have the right to see both their own pay and the average pay broken down by gender within the same job category, regardless of any suspicion of discrimination. This information must therefore be accessible to all employees. Employers must also make the criteria for pay determination and pay development easily available, and no attempts shall be made to prevent employees from sharing information about their own pay.
- Better routines: The enterprise must begin the work of analysing and documenting the pay criteria in the organisation and categorising which positions involve equal work or work of equal value. The enterprise must clearly be able to justify pay differences on the basis of objective factors such as, for example, duties, seniority, work experience and competence.
- Transparency in recruitment: The directive requires employers to state the starting salary or salary range for advertised positions, for example in job advertisements or before the interview. It will no longer be permitted to ask for or obtain information about the candidate’s current or previous pay.
- Stricter reporting requirements: The directive entails reporting to a separate public body, and the rules are expected to be enforced more strictly than today. There are also greater requirements as to the detail and scope of the information to be reported.
- No retroactive effect: The introduction of the directive cannot lead to employers being obliged to pay back pay retroactively. However, the directive may mean that employees must have their pay adjusted upwards to reach the same level as colleagues with similar tasks, experience and competence.
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Measures enterprises should start implementing already now
Even though it is still unclear how the Norwegian rules will be formulated, enterprises should nevertheless start preparing for the Equal Pay Directive. It is advisable to review existing routines for pay determination and assess whether they comply with the forthcoming requirements. The Equal Pay Directive will not make pay differences illegal, but enterprises must be able to explain and document the basis for any differences and ensure that the differences are not due to gender or other discriminatory or subjective factors.
Recruitment processes must also be adapted. Pay information must be provided in job advertisements or in some other way in connection with recruitment, and it will no longer be lawful to ask about current or previous pay when hiring. HR, managers and others who work with recruitment must therefore receive training so that they do not ask about current pay or pay history during the recruitment process.
The enterprise should prepare to update the staff handbook and similar documents so that employees receive clear information about their rights under the Equal Pay Directive. Routines should be established for how enquiries about pay levels are to be handled, and it may be appropriate to create templates for information about the criteria for pay determination and pay development. These documents must be available to all employees.
Even though the reporting obligations will not enter into force until 2027 at the earliest, enterprises can already begin the work of preparing and adapting guidelines and routines for pay reporting. This should be done in cooperation with employee representatives.
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