payria.eu

Do equal pay transparency rules apply to semi-public employers?

Healthcare facilities, housing associations and educational institutions sometimes think that their collective labour agreement exempts them from the EU equal pay transparency rules. This article explains why that assumption is not straightforward.

Yes, semi-public employers are in principle simply subject to the EU equal pay transparency directive, in the same way as a regular company. The distinction that the directive makes is not about who the owner is or where the money comes from, but about the legal form of the employer and the employment relationship that applies to it.

The detail most often overlooked in this context: an existing, detailed collective labour agreement with salary scales is not an exemption. Many semi-public organisations assume that their compensation is already transparent enough because the scales are documented. However, the directive requires specific, additional matters that a collective labour agreement in itself does not automatically address, such as the salary range in the job advertisement, the prohibition on asking about current salary, and the right of employees to request compensation information.

What semi-public means in practice

Semi-public generally includes organisations with a private law legal form — a foundation, association, private company or public company — that perform a public task or are largely publicly funded. Think of healthcare facilities, housing associations, educational institutions, municipal transport companies and waste processors that are organised as separate legal entities. They differ from public authorities in the strict sense, such as ministries and municipalities themselves, which have a public law status.

Why the directive does not look at the source of funding

The directive is about employers and employment relationships, not about funding flows. A foundation that is entirely funded through subsidies is, for the purposes of these rules, an employer like any other. Supervisory authorities look at the legal form and number of employees, not at whether the organisation pursues profit. Public law authorities may have a slightly different position for other reasons, for example because their compensation is already determined by other law; that is precisely the point where semi-public organisations often go wrong, because they incorrectly place themselves in that category.

The hundred-employee threshold counts the same way here

For the reporting obligation that applies above a certain size, the number of employees of the legal entity is counted, not of the sector or the municipality where the organisation operates. A foundation with multiple locations and a total of more than a hundred employees is assessed on that total, even if the locations operate under different names. Those who are unsure whether their own organisation is above or below that threshold can have that clarified in a few questions without any obligation attached to it.

What collective labour agreements do and do not address

A collective labour agreement with job scales often already addresses much of what the directive means by gender-neutral criteria: a system in which jobs are compared on the basis of skills, responsibility and effort, regardless of who fills the job. That is a good starting point, but it is not the same as the separate obligations concerning the job advertisement, the information rights of individual employees, and — where the organisation is large enough — reporting on the compensation difference per category. Those obligations apply alongside a collective labour agreement, not instead of it.

Where this often goes wrong in practice

The most common assumption is that an organization already accustomed to public salary scales automatically complies with all aspects of the directive. In practice, the link between the existing job classification and the new requirements for objective, gender-neutral criteria is often missing, and there is no established procedure for an employee's information request. An overview of which obligations precisely apply and what is required for them is clearly presented by subject in the knowledge base, sorted by situation.

What you can do now

For semi-public employers, the first step is no different than for any other organization: determine under which legal form the employment relationships precisely fall, and whether the workforce exceeds one hundred employees. If you also want to see where the information used comes from, you can read that on the page on how the information is created. For your own situation, with all the specifics of a particular collective bargaining agreement or legal form, a lawyer or the competent supervisory authority remains the appropriate point of contact.

Do you want to see where your organization currently stands without any obligations? Take the free quick-scan or read the topics that best match your situation — that will take you less than half an hour.

This article is general information and not legal advice.