Equal Pay: update on the Legislative Process Related to the Amendment of the Equality Act

Nov 12, 2018
Jérôme Frachebourg, member of the Foundation Board
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In recent months both Houses of Parliament have examined an amendment to the Equality Act, adding a new section entitled “Analysis of Equal Pay and Audit”.

This proposed addition has given rise to numerous parliamentary and media debates, often very emotional, including the desirability of introducing mandatory equal pay control and legislation on this issue. The bill, although very watered down compared to the first version proposed by the Federal Council, is now on the verge of success.

The main elements of the new law are:

  • employers with more than 100 employees will have to perform an internal pay equity analysis, which applies to both private and public employers;
  • this analysis must be carried out “according to a scientific method and in accordance with the law”, with the Confederation providing all employers with a free standard analysis tool;
  • this analysis must be verified by an independent body, namely an approved audit firm, the Federal Council being responsible for setting the criteria governing the training of auditors;
  • the result of this analysis should be communicated to employees. For publicly-traded companies as well as for public sector employers, the result should be published;
  • no penalty or obligation to correct an unequal situation is provided for in the bill.

As for the formal aspects, the future law sets out the following rules:

  • the analysis must be repeated every four years. However, if the analysis shows that equal pay is respected, the employer in question will be permanently released from the obligation to carry out an analysis in the future;
  • the Federal Council is responsible for setting the date by which the analysis will have to be carried out for the first time by the employers concerned;
  • the Federal Council must submit a report on the effectiveness of the obligation to conduct this analysis no later than nine years after the law comes into effect;
  • the validity of the new law is limited to 12 years from when it comes into effect.

To date the matter has been dealt with by the Houses of Parliament and only a few minor technical differences remain on how to calculate the threshold of 100 workers. These differences should be resolved during the winter session of the Council of States (26.11.-14.12.2018). The date of entry into force of the new law has not yet been fixed.

From a global point of view, more than the content of the new law (which represents the bare minimum action which should be taken) is the fact that the Federal Parliament has agreed to legislate on the issue of equal pay at all, despite several attempts by representatives of the economic right to bury the project.

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