Equal – compared to whom?
The EU Pay Transparency Directive stipulates equal pay for equal or equivalent work. We have already addressed the question of what “Equal Pay” is in this blog (“Pay Transparency Directive: Equal or equivalent work”).
A key aspect of this topic is also the question of how to create and define comparison groups as a means of determining whether employees perform equal or equivalent work, which must then be paid equally.
This is not an easy undertaking. Yet establishing suitable comparison groups is the foundation for legally compliant equal pay. Because comparing apples with pears is impossible nor is there any need to pay apples like pears.
So where do you look to identify valid comparison groups?
A look at your own company
In principle, it makes sense to start by making comparisons within your own company and establishing suitable comparison groups. Your company provides a complete picture
and the first step consists of roughly identifying comparable jobs and then evaluating and categorizing these jobs. It generally makes sense to include as many different criteria as possible in the evaluation so as to define as many different small groups as possible or to determine that the differences are not especially significant even when examined very closely.
Thinking outside the box
But looking at your own company is not necessarily the be all and end all. Because the Directive (EU) 2023/970 explicitly states in Art. 19 (1) that forming comparison groups is not limited to one or the same company:
“When assessing whether female and male workers are carrying out the same work or work of equal value, the assessment of whether workers are in a comparable situation shall not be limited to situations in which female and male workers work for the same employer, but shall be extended to a single source establishing the pay conditions. A uniform source exists if it defines all elements of remuneration relevant for the comparison between employees.”
A look into the past
It is also important to note that forming comparison groups is not limited to the present. Facts and figures from the past can also provide a legally compliant basis. Especially if the present facts and figures are less extensive. This applies regardless of whether you are forming internal or external comparison groups and provides a good (supplementary) means of creating a valid basis for group formation.
Last, but not least: Statistics
Yet if internal comparisons, thinking outside the box and looking into the past are all not enough to generate a useful result, then using statistics is another option. Ideally, of course, ones which provide the right figures from sources which are as reputable and trustworthy as possible. Art. 19 (3) of the Directive specifically mentions this option.
What can we do for you?
Do you intend to begin consistently implementing equal pay at your company? Do you need support with forming suitable comparison groups? Do not hesitate to contact us!
Summary of the key facts:
- Choosing the right comparison group(s) is essential to provide equal pay for equal or equivalent work.
- Article 19 of the EU Pay Transparency Directive defines the criteria for forming comparison groups.
- The Pay Transparency Directive has to be transposed into German law by 2026 and more specific details may still be needed.
