Employer obligations and the gender pay gap in Belgium
Published on 19th Jan 2024
What measures has Belgium taken already to address the gap as it looks to implement the EU's Pay Transparency Directive?
The gender pay gap continues to persist as a significant issue not only globally but also within the European Union. Despite continuous efforts to address this imbalance, there remains a substantial disparity between the salaries of men and women.
To combat this ongoing problem, the EU has recently introduced the Pay Transparency Directive, which aims to enhance salary transparency and eliminate gender-based salary disparities.
In Belgium, multiple sets of legislation already govern equal pay. Alongside the existing equal pay legislation as it stands today, there is now the Pay Transparency Directive, which has not yet been implemented in Belgium.
Existing pay-gap legislation
Belgian law mandates equal pay for equal work or work of equal value between female and male employees. Employers must ensure gender equality in all aspects of remuneration, including job evaluation and classification systems, which must be gender neutral.
Translated into Belgian law, Collective Bargaining Agreement (CBA) number 25 – rendered obligatory by Royal Decree – imposes equal pay for men and women for equal or equivalent work. The text of CBA No. 25 must be included in the work regulations of companies operating in Belgium.
Additionally, equal pay is also mandated based on the "Law of 10 May 2007 to combat, amongst others, discrimination between women and men", which is one of the main anti-discrimination laws covering employment relations. This requirement is also reinforced by the national CBA number 95 concerning equality of treatment during all stages of the working relationship.
Furthermore, the Remuneration Protection Act confirms the principle that, in application of the EU Treaty, every employee can submit a claim to the competent court to enforce the principle of equal pay for male and female employees.
Company 'social balance' audits
On a company level, based on the Gender Pay Law of 22 April 2012, differences in pay and costs between men and women should be outlined in the company’s annual audit ("social balance sheet"). These annual audits are transmitted to the National Bank to be publicly available.
Moreover, every two years, companies with 50 or more employees must create a report analysing employees' remuneration structures by gender. This report covers direct pay, benefits, non-statutory employers' social insurance contributions, and other non-statutory benefits. It further breaks down the data by employees' categories, job levels, length of service, and qualifications.
This obligation applies to companies that employ more than 50 employees in Belgium. The report's comprehensiveness depends on the company's size: companies with fewer than 100 employees must submit a shortened report, while companies with more than 100 employees must submit a full report. This report consists mainly of the same data as the full report but with less broken-out data (for example, no need to break out the data by the type of function).
Action plans, mediation and sanctions
If this analysis shows that women earn less than men, the company will be required to produce an action plan. Also, if the publication of the social balance or the bi-annual report leads to the suspicion of pay discrimination against women, an internal mediator can be appointed by the employer (at the proposal of any collective bodies). The mediator will establish whether there is indeed a pay differential and, if so, will try to find a compromise with the employer.
The type of sanction will depend upon the relevant legal ground and provision that would have been violated. Some rules (for example, on social balance) are theoretically sanctioned by an administrative or criminal penalty. For example, failure to publish broken-down data in the social balance or to submit the analysis report can trigger level-two sanctions; that is, either criminal fines ranging from €400 to €4,000 or administrative fines ranging from €200 to €2,000.
Non-compliance with CBA No. 25 is mainly civilly sanctioned, with the possibility to claim reinstatement and entitlement to a six-month protection indemnity in case of refusal to do so by the employer. The 2007 Discrimination Law provides – like other discrimination laws – mainly civil sanctions, including nullity of provisions, damages, injunctive relief and dismissal protection.
Pay Transparency Directive
The EU Pay Transparency Directive – a significant move to address pay equality – was published in the EU Official Journal on 17 May 2023 and effective 7 June 2023, with a three-year window for Member States to adopt it into their national laws.
This directive primarily introduces gender pay gap reporting measures, similar to those in the UK but with stronger enforcement mechanisms. It also mandates rectifying pay gaps of 5% or more and enhances pay transparency for current and prospective employees.
The directive is not yet implemented into Belgian law.
Osborne Clarke comment
Regardless of the uncertainty around the timing for the final implementation of the Pay Transparency Directive in Belgium, employers should be taking all possible measures to address any gender-related disparities in compensation. The criminal or administrative fines can easily be overshadowed by the high risk to reputation, workforce retention and competitiveness in a tight labour market.
Addressing gender inequality is one of the core tenants of being a responsible employer and the employment team at Osborne Clarke helps clients analyse their current practices and proactively develop sustainable and equitable workplace practices and policies. Our international ESG team can support with synchronising your values with rapidly changing legislation and legal best practices.