The obligation to report on the gender pay gap is linked to the number of employees an employer has on staff. If you fall below that threshold, the reporting obligation does not apply, but that does not mean nothing applies to you: a number of other obligations under the pay transparency rules have no threshold and therefore also apply to smaller employers. If you are around the threshold, the moment at which you count and the way in which you count will determine whether this becomes relevant for you this year or only later.
Whether the reporting obligation applies to your company therefore depends on two questions: how many employees do you count, and at what moment. Both questions are answered by the regulation itself, but the precise counting method and the date on which the measurement is taken are not firmly established in every detail for every situation. For the exact application to your own workforce, a lawyer or the competent supervisory authority in your Member State is the appropriate point of contact.
What the one hundred employee threshold means
The reporting obligation is aimed at employers of a certain size, with one hundred employees as the lower threshold. Below that threshold, the obligation to periodically report on compensation differences between men and women per job category ceases to apply. This is a separate obligation in addition to the job classification and remuneration policy, and is independent of the question of whether you already comply with the other parts of the pay transparency rules.
The way in which the number of employees is determined, and whether this is done per establishment or for the entire undertaking, is a question in itself that has already been written about elsewhere. For this article, what is important is that the count is not a snapshot that you take once and then forget: the number of employees can change, and with it your position relative to the threshold can also change.
What if you are around the threshold
Many SMEs are not well above or below one hundred employees, but around that number. A growing installation company that is approaching the threshold this year, or an organisation that fluctuates around that number due to seasonal influences or temporary contracts, would do well to repeat the count not once but periodically. If you grow above the threshold, the reporting obligation arises; if you stay below it, it remains absent, but the other obligations continue to apply in full.
It is advisable not to wait until the moment when the threshold has already been exceeded. Job classification and remuneration policy take time to set up, and that time is no longer available once the reporting obligation has already started. Those who now already have insight into their own job categories are in a better position if the reporting obligation becomes relevant at some point. the knowledge base with explanations for each obligation shows which components become relevant when, even if you are currently still below the threshold.
What applies if the reporting obligation does not apply to you
Employers with fewer than one hundred employees are not exempt from the pay transparency rules as a whole. The range in job vacancies, the prohibition on salary questions to candidates, the requirement for gender-neutral criteria in recruitment and compensation, and the information rights of employees apply without a threshold. This means that an office manager at a company of twenty employees can face the same questions as an HR manager at an organisation of three hundred, only without the periodic reporting obligation.
The distinction between what does and does not depend on your size is not immediately clear to many employers. The regulation builds up the obligations in layers: a base layer without threshold, and an additional layer from one hundred employees onwards. Once you understand that distinction, you also know better where your own priority should lie.
How you check this for your own company
Whether the reporting obligation applies to you this year, next year, or not yet depends on facts that differ per company: your current workforce, the structure of the enterprise, and the counting method used by the competent authority. General guidance cannot replace that factual assessment, but it does provide an initial indication of where you roughly stand.
Would you like to have that checked for your own situation in a few minutes, then you can with a few questions get an indication of what applies to you. For those who want to know how that indication is arrived at, this is explained on the page about the method behind the compliance check, and for those who after the initial indication want to proceed with the detailed breakdown per obligation, you will find on the overview of what the subscription adds what is involved.
The free compliance check and knowledge base give you, based on your own answers, an initial picture of what already applies now and what will become relevant with a larger workforce. It costs no account and no half hour of your day, only the time to answer a few questions.