Last week, Finland proposed
a new law to increase pay transparency and prevent gender-based pay discrimination by allowing employees to access their colleagues’ pay information. The bill, expected to be passed in parliament before elections in April 2023, has received criticism from both unions and businesses. If adopted, the Finnish experiment will be closely watched and might encourage other countries, especially in Europe, to consider a similar approach. It Is not clear whether this will apply to all employers operating in Finland or just those headquartered there.
The proposal suggests that an employee could ask for their colleagues’ salary information if they suspect gender discrimination, and the employer might be obligated to provide such information. In addition, employers might be required to report annually on their remuneration system and union stewards would have the right to obtain payroll information in certain circumstances.
For context, Finland already publishes the taxable income of every citizen annually, and this new law is intended to take the transparency mandate further to provide a more accurate picture and close the gender pay gap.
Upon its publication, the proposal received resistance from unions and business for different reasons. Businesses believe the new law will increase workplace conflicts and administrative burdens and violate employee privacy. Union groups believe it should go further and make employees’ salary information available to everyone in the workplace. Additionally, the effectiveness of the proposal is under question as one report shows that gender pay disparity in Finland is caused by the pay gap between female- and male-dominated occupations and sectors, not lack of pay transparency.
Despite the disagreements, Finnish Prime Minister Sanna Marin is pushing ahead with the legislation. “What is central to the government’s programme is the elimination of unjustified pay gaps,” Equality Minister Thomas Blomqvist noted. “They will now be addressed more rigorously.”
