Equal Pay

The Equal Pay Act transposes Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023 on strengthening the application of the principle of equal pay for men and women for the same work or work of equal value through pay transparency and enforcement mechanisms (the “Directive”). 

The Equal Pay Act introduces new obligations for employers in the area of remuneration, vis-à-vis employees, applicants for employment, as well as relevant public authorities and public institutions. For the purposes of the Equal Pay Act, “pay” is understood broadly and includes not only the basic wage or salary but also complementary or variable components of remuneration (e.g. performance bonuses, incentive bonuses, etc.). The scope of these obligations varies depending on the number of employees of the employer. 

A key principle underlying the new equal pay legislation is that any difference in pay between female and male workers within the same category of workers must not exceed the statutory threshold of 5%, unless such difference can be duly justified on the basis of objective and gender-neutral criteria. 

Although the Equal Pay Act primarily addresses the principle of equal pay between men and women, the recent amendment to Act No. 311/2001 Coll., the Labour Code, as amended, extends the assessment of equal work and work of equal value also to the remuneration of workers of the same sex. In practice, this means that employers will be required not only to ensure formal compliance with the rules on equal pay based on sex, but also to establish a well-documented and objective framework for job evaluation and pay setting within comparable categories of workers across the entire workforce. 

Although certain obligations (such as regular pay reporting) apply primarily to employers with more than 100 employees, all employers will be required to ensure that their pay structures and underlying remuneration principles are aligned with the new legal framework. 

1.        Introduction of pay structures / reorganisation

Employers are required to establish pay structures ensuring compliance with the right to equal pay, by 31 July 2026. 

A key issue is the assessment of which positions constitute the same work or work of equal value (i.e. fall within the same category of workers). 

The pay structure must be based on objective and non-discriminatory criteria which:        

• are not based on sex,
• include factors such as skills, responsibility, effort, working conditions and other relevant factors,
• are applied in an objective manner. 

The Equal Pay Act explicitly provides that, in addition to the above criteria, due consideration should also be given to soft skills (e.g. social and communication skills). However, this requires that such skills be clearly, transparently and measurably defined in order to prevent potential disputes in the future. 

By 30 June 2026, the Ministry of Labour, following consultations with the Slovak National Centre for Human Rights, will prepare analytical tools and a methodology intended to support and guide the assessment and comparison of the value of work (the “Ministry Methodology”) in accordance with the above criteria. 

In this context, the European Institute for Gender Equality (EIGE) has published a practical toolkit entitled “EU-wide guidelines on gender-neutral job evaluation and classification: Step-by-step toolkit” for gender-neutral job evaluation. This tool was developed in the context of the implementation of the Directive and includes practical tools for assessing and comparing the same work and work of equal value. 

However, the process of aligning existing remuneration systems with the statutory requirements should commence without undue delay (i.e. even prior to the publication of the Ministry Methodology), as it constitutes a complex and organisationally demanding process. Even before the methodology is published, employers should ensure that their organisational structure and job categorisation are, at least in their basic outline, adapted to the requirements arising from the Equal Pay Act, the Directive and related documents issued by the European Commission and other bodies of the European Union.

The legal framework established by the Equal Pay Act will, in practice, lead to a limitation of the individual discretionary powers of employers, or managers, in determining remuneration. Decisions regarding the level of pay – including the initial salary – will have to be based on a pre-defined pay structure applied in an objective manner. Employers with more than 50 employees will also be required to establish transparent and non-discriminatory procedures and criteria governing pay progression. 

A particularly sensitive area will be the return of employees from maternity leave or parental leave. Upon their reintegration into the workplace, it will be necessary to assess whether the conditions of work or remuneration have changed in the meantime in a manner that could place them at a disadvantage compared to other workers performing the same work or work of equal value.

 It is also necessary to review historically established pay differences. Pay disparities that cannot be justified on the basis of objective criteria will be difficult to defend once the Equal Pay Act enters into force and may therefore represent a significant legal risk for employers. 

2.        Transparency and information obligations

 Certain information obligations under the Equal Pay Act will arise already prior to the job interview with a candidate for employment. In this context, employers will be prohibited from requesting information about the remuneration of an applicant from their current or previous employer. 

In relation to employees, employers will be required to make available the criteria used for determining pay and, upon request of an employee, to provide in writing and within the statutory time limit information on pay, specifically regarding:

• the employee’s individual pay level,
• the average pay levels, broken down by sex, for the category of workers performing the same work or work of equal value as the employee. 

An exception to the above applies where the information provided would make it possible to identify the pay of a specific employee. 

Employers will also be under a statutory obligation to inform employees, on an annual basis, of their right to obtain information on pay and of the procedure for exercising that right. 

The information on the average pay levels, broken down by sex, for the category of workers performing the same work or work of equal value as the requesting employee will have to be provided by the employer for the first time in relation to the year 2027. 

3.        Report on the pay of female and male workers 

Employers with more than 100 employees will be required, following consultation with workers’ representatives, to submit to the Ministry of Labour, Social Affairs and Family of the Slovak Republic (the “Ministry”) a report on the pay of female and male workers (the “Pay Report”), to the extent specified in the Equal Pay Act. The Pay Report will include, inter alia, information on the gender pay gap, the gender pay gap in complementary or variable components of pay, and the median values of those differences. Employers employing 

• 100 to 249 employees will submit the Pay Report to the Ministry once every three years,
• at least 250 employees will submit the Pay Report to the Ministry annually. 

Where the Pay Report reveals an unjustified gender pay gap of at least 5% in average pay levels between female and male workers which has not been remedied within the statutory time limit, the employer will be required to carry out, in cooperation with workers’ representatives, a joint pay assessment, the outcome of which must be made available to employees and submitted to the competent authorities. 

4.       Sanctions for administrative offences of employers 

The Equal Pay Act introduces a new administrative offence within the framework of administrative liability of employers. If an employer fails to submit the Pay Report to the Ministry even within an additional time limit set by the Ministry, the Ministry will impose a fine ranging from EUR 500 to EUR 4,000. Such a fine may be imposed within a preclusive period of two years from the date on which the breach of this obligation occurred. 

Other breaches of obligations under the Equal Pay Act will be subject to sanctions pursuant to Act No. 125/2006 Coll. on Labour Inspection and on the amendment of Act No. 82/2005 Coll. on Illegal Work and Illegal Employment and on the amendment of certain acts, as amended. At the same time, the Equal Pay Act extends the scope of labour inspection to include the monitoring of compliance with obligations arising from this new legal framework. 

Employers will face the risk of sanctions not only for failure to comply with the reporting obligation towards the Ministry, but also for breaches of other obligations under the Equal Pay Act, compliance with which will be subject to supervision by the labour inspectorate. 

5.       Judicial protection of employees 

In addition to administrative sanctions, the Directive and, consequently, the Equal Pay Act provide for the right of employees to judicial protection in enforcing rights and obligations related to the principle of equal pay. In accordance with the Directive, court proceedings should be easily accessible, including after the termination of the employment relationship in which the alleged discrimination occurred. 

The Equal Pay Act also expressly shifts the burden of proof to the employer in certain situations. In the event of a dispute, the employer will be required to demonstrate that no discrimination has occurred, even without the employee first establishing facts from which it could reasonably be presumed that a breach of this right has taken place. 

An employee will have the right, in court proceedings, to claim financial compensation for the damage suffered in connection with a breach of the right to equal pay, within a limitation period of three years. 

Such compensation may include interest on overdue pay and compensation for (i) unpaid remuneration, (ii) lost opportunities, (iii) non-material damage, and (iv) other damage, including damage caused by intersectional discrimination, depending on the circumstances of the particular case. 

In this context, we would also like to emphasise that judicial protection in cases of a breach of an employee’s right to equal pay by an employer does not apply exclusively to situations involving differences in pay between men and women. 

The right to equal pay for the same work or work of equal value also applies between workers of the same sex. This means that even where a particular category of workers is composed exclusively of persons of one sex (such as only men), the possibility of seeking judicial protection is not excluded. 

For instance, if an employer were to grant different levels of pay to two male employees performing the same work or work of equal value without an objective and justified reason, the affected employee would be entitled to seek redress before a court. 

According to the explanatory memorandum to the draft Equal Pay Act (special part), the purpose of the Equal Pay Act is not to have retroactive effect. The provisions of the Equal Pay Act should therefore apply only from the date of its entry into force. 

6.       Conclusion 

The new equal pay legislation represents a significant change in the area of remuneration and substantially increases the requirements for transparency, objectivity and documentation of pay-related decisions. Pay transparency will become an area subject not only to inspections carried out by the labour inspectorate but also, in the event of disputes with employees, to judicial review. 

The implementation of the new rules will require a comprehensive internal review of existing pay structures, processes and documentation. In light of the scope of the changes and the applicable timeframe, we recommend commencing preparatory steps without undue delay in order to minimise legal and reputational risks (in particular the risk of potential disputes).