Equal pay: yes. Red tape: no.

No one in the Luxembourg business community disputes the aim of equal pay for women and men for the same work. It is a principle we have long championed, well before Brussels turned it into a directive. Our companies have already introduced more transparent and fairer pay policies, because this is in their own interests as much as in those of their employees.

The problem is therefore not the aim pursued by Directive 2023/970. The problem lies in the means chosen to achieve it.

The European text, in its current form, imposes on companies a host of reporting obligations, the overhaul of HR systems and new legal procedures, without in return offering the clarity essential for smooth implementation. Uncertainties remain regarding such central concepts as ‘work of equal value’, exposing companies to the risk of litigation even before they have had the opportunity to comply properly. The result is a heavy administrative burden, significant compliance costs and legal uncertainty that benefits neither employees nor employers.

It is a piece of legislation which, whilst well-intentioned, risks doing more harm than good. It could drag labour relations into the courts when there is no need to do so, and divert companies’ energy away from what really matters: taking concrete action to address pay gaps rather than documenting their existence in ever more complex reports.

Furthermore, this directive adds to a wave of European regulations whose cumulative impact has not yet been fully realised. Taken in isolation, each new piece of legislation may seem reasonable at first glance. Taken together, however, they are weighing down the competitiveness of our businesses at a time when Europe specifically needs to strengthen its capacity to invest, innovate and create jobs. Economic decision-makers and political leaders agree that over-regulation – often of European origin – is one of the main obstacles to productivity, the revival of investment and, more broadly, Europe’s industrial and technological sovereignty.
The figures speak for themselves: one month after the final transposition deadline, only 4 out of 27 Member States had complied – and often only partially. When the Member States themselves are struggling to hide their difficulties, it becomes difficult to carry on as if nothing were amiss. This is not about abandoning the objective, but it is clear that a pause would be useful, to allow time to establish a clearer and more operational framework.

We are confident that the Luxembourg government and the social partners, in the spirit of a dialogue focused on practical solutions, will be able to drive forward this call for simplification. It is by working together on a realistic framework that we will be more certain to achieve the equal pay we all so fervently desire – not by being forced to accept a text which, due to a lack of clarity, risks having the opposite effect to that intended.