The announced end of wage secrecy in Luxembourg

Even though Luxembourg is doing well in Europe when it comes to equal pay between men and women, the effective annual salary of Luxembourg workers remains on average higher than that of their female counterparts.

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In 2026, a European directive that requires companies to be more transparent about the remuneration paid will probably change the lines...

Equal pay in Luxembourg?

In 2022, STATEC published encouraging figures concerning gender equality in Luxembourg. It appeared that the average wage of women was slightly higher than that of men. More specifically, the wage gap leaned in favor of women with a rate of -0.7%.

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This situation is an exception in the European Union, where men earn on average 12.7% more than women. This gap is measured by the GPG (“gender pay gap”), which represents the difference in the average gross hourly wage between the sexes.

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However, this indicator deserves to be put into perspective, as it is not completely representative. On the one hand, the presence of a low percentage of people receiving very high salaries or bonuses can significantly influence the results. On the other hand, the GPG is based on the annual full-time equivalent salary, which does not reflect the net salary actually earned by women.

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It should also be noted that Women work more part-time than men in Luxembourg (36% against 8%). If we consider the average effective annual salary excluding bonuses, the wage gap remains in favor of men, reaching 10%.

What is the situation in Europe?

In Europe, the Treaty of Rome established the principle of equal pay in 1957. However, wage inequality remains a reality in all countries, except Luxembourg, and again, only in theory, as we saw earlier. In 2021, this wage gap still reached 12.7% on average in the European Union.

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The reasons for this difference are multiple. First, women are working more part-time jobs, often to be able to take on unpaid tasks such as childcare or housework.

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Second, women's career choices are often influenced by their family responsibilities. In addition, they are overrepresented in low-wage professional sectors and underrepresented in positions of high responsibility, which offer higher salaries.

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However, reducing these wage differences could have significant positive effects. This would help reduce the poverty rate and boost the economy. Moreover, it would improve the functioning of social security systems and could even increase gross domestic product (GDP).

Transparent salaries: now a European obligation

One of the main obstacles to equal pay between men and women is the lack of pay transparency. However, the situation is changing. In March 2023, the European Parliament adopted new binding rules to combat wage secrecy.

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From now on, employees of European companies will be able to ask for clear and detailed information on the remuneration applied to their colleagues. Salary secrecy will be prohibited, allowing injured persons to defend their rights. In addition, during a job interview, employers will have to communicate the starting salary (or a salary range) and will not be able to ask candidates about their previous earnings.

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In companies with more than 250 employees, the wage gap between men and women will have to be published every year. If this gap exceeds 5% and cannot be justified by objective and non-discriminatory criteria, companies will have to set up a joint evaluation of remuneration in collaboration with employee representatives.

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Workers who are victims of wage discrimination will be able to request compensation, including the payment of unpaid wages or bonuses. In addition, employers who do not respect these European rules may be sanctioned and fined.

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The final text of this European directive was adopted on 24 March 2024. In Luxembourg, its transposition into national legislation must be carried out by 7 June 2026. These new measures will apply to both the public and private sectors.

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