The Ministry of Economic Affairs plans to adopt parts of the European Union’s Pay Transparency Directive that do not increase the administrative burden on businesses, after ministers vowed not to transpose the legislation last week.
Last week, the Minister of Economic Affairs and Industry Erkki Keldo (Reform) said the directive would not be transposed into Estonian law because it creates too much additional work for businesses.
He said Estonia would rather pay a fine from the EU than create more bureaucracy for businesses.
Estonia has the highest gender pay gap in the European Union, ranging from 13 to 18 percent depending on the statistics cited.
But now, the ministry has said some clauses will be adopted. These include employers notifying job applicants of the salary range for the position before the job interview takes place.
Additionally, a potential employer would no longer be allowed to ask about salary at a previous job during a job interview.
Employers would also not be allowed to prohibit employees from disclosing their salary to other colleagues.
The Employment Contracts Act would be amended to state that a man and a woman doing the same work may not be paid differently unless there is an objective justification.
Keldo said the problem with the directive was that it required new reporting obligations and the creation of different so-called job families for all companies. He said this does not suit Estonia’s digital state.
“We have our own employee register, we have different job description codes, and we want the European Commission to essentially change that reporting side /…/ in a way that would fit into our digital system,” the minister said.
For reporting purposes, employers would have to group different positions with similar pay into so-called job families.
“The pay transparency directive provides that for people doing equivalent work, if their job title is the same and the nature of their work is roughly the same, the difference in pay should not be more than 5 percent,” Keldo added.
The government would like to postpone this requirement by two years. Ain Käpp, a member of the council of the Estonian Employers’ Confederation, said they support the ministry’s decision.
“This would affect a lot of companies and, in our view, would not solve the problem it is intended to solve. In some companies, it would even create a need for additional staff. We should oppose all legal changes that create bureaucracy,” Käpp said.
Telia HR manager Ingrid Viinapuu, on the other hand, said they have already made preparations to implement this directive as well.
“We have been using job profiles for some time already and we review them every year. So yes, we have updated our job profiles and we have data on how our employees’ positions belong to different job families,” Viinapuu said.
She said the only new requirement would be the need to start submitting that data.
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