Federation Wallonie-Bruxelles transposes EU directive on pay transparency

On 30 March 2023, the European Parliament adopted Directive (EU) 2023/970 (the “pay transparency directive” or PTD), intended to ensure that women and men within the EU are paid equally for equal work or work of equal value, with a focus on transparency and enforcement of the law.

Member states have until June 2026 to implement the PTD. Unusually for Belgium, the Fédération Wallonie-Bruxelles (“the Federation”) is acting as a frontrunner, being the first government in the EU to transpose the PTD via its recent decree (“the decree”) amending the decree of 12 December 2008 on combatting certain forms of discrimination.

Scope of application

The decree applies to the following entities under the responsibility of the Federation:

• Organisations created by the Federation or those in which it holds equity stakes;

• Educational institutions of all types, levels, and networks within the Federation; and

• Government administrations and institutions under the Federation’s control.

The decree applies to candidates applying for positions and to workers holding positions within these organisations, irrespective of the nature of the collaboration (employment contract, civil servant).

Transparency measures

The decree aims to guarantee the right to gender pay equality through transparency, assessing regular pay and benefits, paid directly or indirectly, in cash or in kind.

Employers in scope must:

• Establish pay structures enabling the (candidate) workers to evaluate whether they are in comparable situations considering the value of work, where possible based on objective, nondiscriminatory criteria agreed with workers’ representative organisations.

• Ensure that, if their professional classification system (job classification) is used to determine pay, the system is based on criteria common to both male and female workers and designed to exclude direct or indirect discrimination based on gender.

• Conduct nondiscriminatory recruitment processes (e.g., job offers and titles) that prohibit the gathering of information on the candidate’s remuneration history.

• Inform candidates, at the time of advertising the vacancy, of: (i) the initial pay or pay range for the position concerned, and, where applicable, the relevant provisions of the collective agreement applied by the employer; and (ii) the pay structure and assessment criteria.

Any nontransparent pay or job classification structure will be considered discriminatory.

As from 2026, workers will be informed annually of their right to receive written information and the steps to exercise the right to information on:

• Their individual pay level; and

• Average pay levels, broken down by gender, of workers performing the same work or work of equal value.

Reporting measures

To enhance transparency, the decree also provides that the government will be responsible for the publication of annual pay gap and career distribution assessments regarding all male and female workers in scope.

Although not required under the PTD, the decree provides for increased transparency regarding leave for family responsibilities. The annual report must include an assessment of leave granted to male and female workers, showing the differentiated pay for maternity, birth, adoption, parental, or other family responsibility leave.

The government will determine the dates by which employers’ initial assessments will be required, based on the size of their workforce.

Enforcement provisions

An employer that fails to comply with pay transparency obligations will be required to prove that no discrimination occurred. The burden of proof will therefore shift from the employee to the employer.

In terms of sanctions, the decree states that when it is determined that a harmful measure has been taken, the responsible person must pay damages equal to:

• Lump sum compensation (up to EUR 3,900, indexed annually, and potentially multiplied by the number of discriminatory criteria in scope of a specific case); or

• The actual damages suffered.

It should be noted that the decree does not explicitly refer to the maximum threshold of a 5% average pay gap between men and women within any worker category, nor the associated joint actions (e.g., the need for justification of the gap or conducting a “joint pay assessment” to investigate and address the causes of the gap).

Deloitte Belgium comments

The introduction of the decree marks the start of the legislative PTD race; however, it remains to be seen to what extent general projections can be derived from this set-up, which concerns an extremely limited range of employers, in a very specific context.

Transparency regarding pay scales and classifications is generally already very high in the public sector, in contrast to the private sector.

The decree will enter into force on 1 January 2025 but some specific obligations, such as the annual reporting obligation and the need to inform employees of their right to gain insights, will not apply until 2026 or a later date to be determined by the government.

Various questions remain to be answered on a practical level, including which statistical measures will have to be reported and what will be the thresholds to determine “reasonable” pay gaps?

We will of course closely monitor future developments in this area and keep you updated.