EU to U.S. on Pay Transparency: We Come From Your Future

A panel focused on the geopolitical, social, and economic forces that confront global companies explored the ways employers can effectively engage with a diverse group of stakeholders while adapting to rapidly changing legislative and regulatory landscapes across the globe.

Is the EU Pay Transparency Directive the future of U.S. pay equity? Opening  the conversation, Alan Wild stated that as policy issues move around the globe, companies in the U.S. should take note of legislation and regulation abroad, particularly in Europe on pay transparency and pay equity. In fact, consider it a “we come from your future” conversation, Wild said.  While pay transparency laws are popping up in U.S. states, the EU directive on pay transparency is one of the more complicated and robust initiatives around the globe. Not only does the EU Equal Pay and Transparency Directive require a significant increase in the reporting obligations of member states but presents a footprint for what we could see in the U.S.

EU directive focuses more on gender than race. While the requirements themselves would be new to the U.S., Lisa Salas, Director of Labor Relations, Europe, DXC Technology, noted that American companies can use their experience with other reporting requirements in the U.S. to prepare for any upcoming pay transparency obligations.

ESG has pivoted the HR role to be much more externally focused, said Lee Caulder, VP of Global Labor and Employee Relations, Albemarle, which means communications plans need to be set to talk to employees about increased data collection.   Employees also feel as though they are working with a purpose when their company is more externally focused through ESG.

Global union movement turned language from labor rights to human rights. The shift in how union movements are seen allows them to gain more attraction and following, argued Wen Dong, HR Policy’s Director of Labor Affairs. While many companies in the U.S. believe that high levels of employee engagement better protect them from union organizing, this is not the case globally. Given the shift in conversation from labor rights to human rights, U.S. employers may not always have that protection.