News & Insights

InternationalHR Best PracticesMay 15, 2018by Stanton LawDo You Have Employees in Europe?

You may be affected by European laws on gender pay reporting.

Although equal pay for equal work is the law in the U.S., the U.S. does not currently have any federal law that requires a U.S. company to report or publish pay gaps. With the #metoo movement looking like it is here to stay, the issue of gender-based pay gaps is already a reputational one.  European laws may turn the issue into a legal one, too, at least for American companies with employees in Europe.

The European Commission launched an Action Plan at the end of 2017 to tackle the perceived issue of pay inequality.[i]  Many E.U. member states have pay transparency laws designed to remove the veil of secrecy on the topic. For example, the U.K. started requiring mandatory gender-pay reporting for certain types of organizations from 2017.[ii] Under the U.K. laws, any entity with 250 or more employees in the U.K. would have to publish certain information.  Similar laws can be found in other European countries.  Some U.S. states legislatures, such as in Minnesota, California, New York, and New Mexico, are taking up the mantle in the absence of a federal law on the topic.

Regardless of whether a U.S. company meets the criteria for mandatory reporting because of its employees in Europe, American employers should expect that the trend will continue towards more transparency: even if you do not have to report gender pay statistics at this time, it is very possible that legislation will come into force in the future that makes it mandatory.  And disgruntled employees are finding it easier and easier to post information on social media that could cause reputational harm even if no laws have been broken.

If you would like further information on whether your company might be affected by European pay reporting laws, please contact Manori de Silva at [email protected] or Jessica Winans at [email protected].