The Swedish government has published its first proposal to transpose the European Union (EU) Pay Transparency Directive, the first EU member state to do so. The EU directive aims to ensure equal pay for equal work or work of equal value between men and women by giving employees extensive new rights to information about their own pay and the pay of male and female peers (see 2023 Global News Brief: European Union: Agreement on Pay Transparency Directive). Member states have until June 2026 to transpose the requirements into local law. Employers need to be prepared by this date.
The Swedish proposal builds on its existing equal pay legislation and reporting. The proposal is currently out for referral to various Swedish organizations and governmental bodies, which must provide feedback on the proposed changes and underlying report by October 4, 2024.
Sweden’s existing legislation — primarily the Discrimination Act (Diskrimineringslagen) — is mainly in line with the directive’s requirements, requiring all employers to conduct annual reviews of equal jobs and jobs of equal value (lönekartläggning), to ensure that no employees are being discriminated against in their salary/wages based on gender. Under the existing legislation, companies with 10 or more employees must document the salary review in writing, including specific measures to address any identified pay gap issues, while companies with 25 or more employees must also produce annual equality plans. The Equality Ombudsman has the right to request the plan, including the annual salary review.
Sweden’s proposals to transpose the EU directive are actually a series of amendments to the current legislation. The proposed amendments include both requirements that aren’t currently in the Swedish legislation (e.g., gender pay gap reporting) and changes or additions to the existing requirements, including:
In terms of overall pay gaps in Sweden, in 2022 women's hourly earnings were 7% below those of men (compared to an EU average of 11%, according to OECD data). The directive will have a lasting impact on pay equity and transparency in Europe; employers in Sweden and other member states should start preparing for the pay transparency requirements to ensure that their pay and benefits are ready for this level of transparency and that they are delivering equal pay. Please refer to WTW’s whitepaper: EU Pay Transparency Directive – Transposing into national law to find out more on WTW’s specific guidance and expert recommendations for transposing this important directive into national law.
