ROMANIAN COMPANIES TO ENFORCE GENDER-NEUTRAL PAY PRACTICES UNDER NEW EU DIRECTIVE

The rules on pay transparency will undergo significant changes with the transposition of Directive (EU) 2023/970 into national legislation by June 7, 2026.

This directive imposes obligations on employers to ensure equal pay between women and men and to guarantee transparency in salary determination, including providing detailed information on pay levels and adopting policies that eliminate discrimination.

Right to information for job applicants and transparent recruitement

One of the core pillars of Directive 2023/970/EU is the right to information for job applicants. Candidates may request, even before being hired, details about the initial pay level or the pay range, which must be based on objective, gender-neutral criteria, as well as relevant clauses from the applicable collective bargaining agreement. The aim is to ensure transparent and informed negotiations between candidates and employers.

Employers can meet this transparency requirement by providing this information in job advertisements or before recruitment interviews.

Moreover, employers will no longer be allowed to ask candidates about their pay history from previous employment. Job postings and job titles must also be gender-neutral, and the recruitment process must be non-discriminatory, thereby upholding the principle of equal pay for work of equal value.

Expanded rights for employees and increased obligations for employers

Employees will benefit from enhanced rights regarding access to information on their own pay and the average remuneration for similar roles. They will be able to request, in writing, information about their own salary as well as the average pay levels, broken down by gender, for comparable job categories. Employers will be required to respond within two months. Additionally, they must inform employees annually of this right and how to exercise it.

Another anticipated change in labor law will allow employees to disclose their own pay in order to exercise their right to equal pay.

Any contractual clause restricting this right will be declared null and void.

However, employers may require confidentiality regarding other salary-related information obtained by employees, provided it is used exclusively to ensure equal treatment.

To support the application of these principles, employers must ensure transparency in the criteria used to determine salaries and in their pay progression policies, including variable or additional components.

These criteria must be clear, accessible, and gender-neutral. Employers with fewer than 50 employees may be exempted from this obligation, but large companies will not.

Annual reporting and joint assessments for large companies

Starting in 2027 at the latest, large employers – those with at least 250 employees – will be required to prepare annual reports on pay differences between women and men. For companies with 150 to 249 employees, reporting will be required every three years.

Reports must include, among other things, gross and median pay gaps, and the breakdown of pay components by gender and worker category.

If these reports reveal a pay gap of at least 5% between women and men for the same job category, and if the employer cannot objectively justify the difference or has not remedied it, a joint pay assessment must be conducted together with employee representatives.

Right to compensation and burden of proof

The new legal framework expressly enshrines the employee’s right to compensation in cases of pay discrimination. This compensation must fully cover the harm suffered and restore the employee to the position they would have been in had the principle of equal pay not been violated.

The burden of proof will rest with the employer, who must demonstrate that no discrimination – direct or indirect – based on gender has occurred.

This principle is already established in existing romanian legislation, specifically in Emergency Ordinance No. 137/2000 on the prevention and sanctioning of all forms of discrimination, which requires the employer to prove compliance with the principle of non-discrimination and to repair any damage caused to the employee.