A draft bill aimed at strengthening the enforcement of the principle of equal pay for men and women for the same work or work of equal value, implementing the provisions of so-called Directive 2023/970 (the so-called pay transparency directive), may have two less obvious consequences.
Smaller pay gaps between new and long-serving employees
Both the directive and the draft bill emphasize measuring pay differences from a gender perspective. What is often overlooked, however, is that pay disparities just as frequently arise from another factor: an employee’s length of service within a given company.
A typical example is a long-serving employee who earns less than a newly hired person in a comparable position. The difference stems from the fact that, over the years, the incumbent’s pay has not been adjusted to the same extent as wages verified by the market—raises were modest and effectively offset by job stability. This may correlate with gender, as research shows that women are generally less effective in negotiating pay rises, but the same applies to older employees. Meanwhile, market conditions and the valuation of a given role change, meaning new candidates expect—and receive—higher pay.
“Disclosing such differences in parallel positions without objective justification—and such cases are, by their nature, more common in larger companies that will be subject to reporting—will in many instances lead to employee dissatisfaction and prompt employers to introduce new pay policies. As a result, in the coming years we may see slower wage growth dynamics, especially when changing jobs. Today, there is a widespread belief that a substantial pay rise is more likely to be achieved by switching employers rather than negotiating internally, and this is often true—but that may change. Pay reports will also give employees a new argument in salary negotiations, while employers, seeking to avoid sanctions for excessive pay gaps, will level up pay for long-serving staff,” says Anna Barbachowska, HR Director at ADP Poland.
More part-time work?
Another potential consequence of the bill is less obvious. Compared with other countries, Poland has a very high share of full-time employment. The draft specifies that the number of employees in a company is to be calculated as full-time equivalents (FTEs) over a given calendar year—this will determine whether a company is subject to the obligation to prepare pay gap reports and how often it must do so. The threshold figures are 100 and 250 employees, meaning the rules will apply to fairly significant employers at the city or county level, such as manufacturing plants or retail businesses.
To reduce reporting obligations, companies may therefore seek not so much to cut jobs as to reduce working hours in certain positions, thereby lowering the number of FTEs while keeping the same number of people employed.
“In many cases, this will be a more rational approach. It allows companies to retain certain roles but assign fewer hours to them. Some employers may conclude that it is better to have more people on the team and rotate staff more smoothly during holidays or periods of increased workload,” Anna Barbachowska concludes.
Source: https://ceo.com.pl/dyrektywa-placowa-moze-zmienic-rynek-pracy-bardziej-niz-sie-wydaje-73716
