Law amendment on income transparency to be implemented

Austria has the third highest gender pay gap in the European Union. On average, women earn 25.5% less than men. Over 18% of the income gap can be ascribed to discrimination. An amendment to the Equal Treatment Act, stipulating the disclosure of average annual incomes by gender for companies employing more than 1,000 workers, will be implemented in 2011. The social partners were closely involved in the development of the law and are generally satisfied with its provisions.

Income situation of women

According to Eurostat data, Austria has one of the highest gender pay gaps in the European Union. While the average wage gap in the EU27 countries was 18% in 2008, Austria’s was substantially higher at 25.5%, making it the country with the third largest income difference between men and women. Even when the data are corrected for differences in age, education, length of employment and segregation effects attributable to the distribution of jobs according to occupations and sectors, the pay gap falls only by seven percentage points. As shown by the latest report on the status of women in Austria (Frauenbericht 2010), the still large remaining gap of 18.1% is caused by plain discrimination.

In 2010, ‘Equal Pay Day’ was reached on 29 September. This means that, on this day, men had on average earned as much already in 2010 as women would earn in the whole year; so, statistically speaking, women work for free for the remaining 94 days.

Law amended

Following an agreement between the social partners in June 2010, a new amendment to the Equal Treatment for Men and Women Act on income transparency was passed by the Austrian Council of Ministers on 19 October 2010 in order to reduce the gender pay gap. The amendment, which will be implemented in 2011, stipulates that companies employing more than 1,000 workers must disclose the average annual incomes of their female and male employees separately, anonymously and adjusted for working time.

Over the course of the coming years, the amendment will gradually be extended to smaller companies. In 2012, all companies with 500 or more employees will be affected by the law. In 2013, it will apply to companies with more than 250 employees and, in 2014 to all companies with more than 150 employees.

The law is expected to force employers into more income equality by making wage discrimination visible. Works council members will be allowed to see the income reports; in companies with no works councils, all employees must have access to them.

The Federal Minister for Women and Civil Service, Gabriele Heinisch-Hosek (from the Social Democratic Party, SPÖ) was, in cooperation with the Minister of Social Affairs, Rudolf Hundstorfer (SPÖ), at the forefront of pushing through the amendment which had been agreed earlier in the coalition government’s work programme (in German, 1.75Mb PDF) as part of the National Action Plan on Equality.

Reactions to the bill

By and large, both organised labour and organised business have welcomed the law amendment (they had reached an agreement on it beforehand).

However, representatives of the vida trade union, which represents a large number of women in low-pay sectors such as retail and care services, are critical of the fact that:

  • there are no sanctions if a company does not comply with the law (by not providing income reports or by providing false information);
  • companies with fewer than 150 employees are exempt.

The Chamber of Labour (AK) refused to agree on penalties for employees, works councils or witnesses of wage discrimination if they violate the obligation of secrecy, although the maximum penalty was reduced from the ministers’ original proposal of €2,180 to €1,500.

Both the Federal Economic Chamber (WKÖ) and the Federation of Austrian Industry (IV) expressed satisfaction with the new law, especially with the fact that the income reports will remain within companies and do not have to be sent to the authorities. In IV’s opinion, the new bill is just one of five focal areas that need further attention in order to achieve gender equality. The other four areas are:

  • generating interest among girls and women to take on education and jobs in science and engineering;
  • improving work-life balance (for example by providing more childcare facilities);
  • increasing the number of women in management positions (although on a voluntary, non-legislative basis);
  • changing traditional gender role models by raising awareness.

WKÖ’s representatives are content that smaller companies are exempt from the law as this spares them ‘exuberant administrative burdens’. WKÖ has thus prevailed with its demand to set the limit at 150 employees, although Minister Heinisch-Hosek’s original draft bill included companies with 25 or more employees.

The Green Party, which is in opposition at the federal government level, has criticised the bill and demanded inclusion of companies with 10 or more employees, as the majority of women work in smaller enterprises on which the law has no impact.

Bernadette Allinger, Working Life Research Centre (FORBA)

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