The employer will be obliged to provide information on the starting salary and the salary range envisaged for the vacant position in the advertisement for the vacant position. The employment contract may not contain a provision prohibiting the employee from disclosing information about his or her salary.
The employer will be obliged to provide the employee, upon request, with data on the earnings of his colleagues. Companies with more than one hundred employees will provide the Social Council and the trade union with a complete set of data on earnings and calculation methods in order to determine whether there is a difference between earnings by gender. In the event of a dispute over lower earnings for work of the same value, the burden of proof lies with the employer. Employers send data to the Social Council periodically, annually or once every three years.
These are the novelties from the draft Labor Law, which is up for public debate until the end of July, along with the draft Law on the Social Council.
The explanatory memorandum states that the aim of these proposals is to align with Directive 2023/970 on employment equality, as this is one of the benchmarks for closing Chapter 19, Social Policy and Employment.
As explained, in order for employees to know whether they are paid equal amounts for equal work or work of equal value, they must have the legal ability to obtain information about their colleagues' salaries, as well as to freely consult others outside the company about their own and their colleagues' salaries.
USS: Confidential data made the law meaningless
The Union of Free Trade Unions (USSCG) told "Vijesti" that they welcome the harmonization of the Labor Law with Directive 2023/970 on strengthening the application of the principle of equal pay for equal work or work of equal value between men and women through wage transparency, and on enforcement mechanisms.
"Due to the fact that the speed of the processes ahead of us in fulfilling our obligations towards the European Union also dictates the pace of social dialogue, social partners will provide their comments and suggestions within the Public Discussion regarding the prepared Draft Law on Amendments to the Labor Law. Harmonization of the Labor Law with the aforementioned directive is of great importance for employees in Montenegro, especially in terms of strengthening mechanisms for respecting the principle of equal pay for men and women for equal work or work of equal value, in terms of ensuring transparency of wages, and for the USSCG a particularly important aspect - ensuring protection of the labor and legal status of an employee who discloses information about his or her earnings," the Deputy Secretary General of the USSCG told "Vijesti". Ivana Mihajlovic.
She assessed that the insistence that earnings data were confidential data "made senseless the legally prescribed principle of guaranteeing the right to equal pay for equal work, in connection with which the USSCG has continuously demanded amendments to both the Labor Law and the Personal Data Protection Law in previous years."
Men earn 21 percent more
Mihajlović states that during the Public Hearing, the USSCG will submit proposals for additional improvement of certain institutes of these laws.
"Among other things, we will advocate that, in order to achieve full transparency, the obligation to report earnings be introduced for employers with fewer than 100 employees, since this is what the Directive itself suggests, and given the structure of our economy, this would be the only relevant thing if we really want to achieve the goal that this Directive entails," said Mihajlović.
She said that they will continue to insist that the obligation to have a job classification document applies to all employers, regardless of the number of employees, "since this document is the basis for determining specific job descriptions, on the basis of which, among other things, it can be determined whether it is the same work or work of equal value."
"The implementation of provisions that will be part of future labor legislation will be crucial, and only well-regulated norms, consistent and adequate application of them in practice, will contribute to reducing the worryingly large gender wage gap, which in Montenegro increased from 12,5% in 2014 to 21,6% in 2021, according to research by the International Labor Organization. Every step forward towards eliminating gender-based wage gaps means a step forward in achieving the rule of law, social justice, optimization of human resources, improved productivity and greater employee motivation," said Mihajlović.
The Employers' Union says that they are currently analyzing the proposed solutions from the drafts of these two laws and the relevant directives with which the laws are being harmonized.
"The proposed texts will be forwarded to our membership for review. After we collect their comments, the Employers' Union will submit them in a consolidated form to the Ministry of Labor, Employment and Social Dialogue within the legally prescribed deadline," the association stated.
"We will advocate that the obligation to report earnings be introduced for employers with fewer than 100 employees, since the Directive itself suggests this, and given the structure of our economy, it would be the only relevant thing," said Mihajlović.
New systematization acts will be written
Employers will have to align their systematization acts with the new norms within six months of the adoption of these laws. They must also state gender-neutral job titles in the systematization act and in the vacancy announcement. An employer who is not obliged to advertise vacancies will be obliged to inform the person with whom they intend to conclude an employment contract about the starting salary and salary range for the vacant position.
Work of equal value is understood to mean work that requires a comparable level of educational qualification, or professional qualification, responsibility, skills, effort, working conditions and work results.
In the event of a decline in purchasing power, the minimum wage increases.
The article of the Law relating to the minimum wage is also being partially amended. The article now states that the Government may periodically, upon the proposal of the Social Council, increase the amount of the minimum wage by decision due to the growth of the general level of wages in the country, as well as the cost of living and changes in them.
It is now added even if there is a decrease in purchasing power.
Purchasing power, according to the economic definition, refers to the amount of goods that can be purchased with one monetary unit. In other words, if the amount of goods that can be purchased with one monetary unit decreases due to an increase in prices, then we are talking about a decrease in purchasing power.
It is also envisaged that the minimum wage will be determined in proportion to the time for which the employment contract was concluded, and it is specified that it will be determined for a period of two years.
The minimum wage in Montenegro has been 600 euros since October last year.
The gender pay gap has increased by 9,1 percent in seven years, from 12,5% in 2014 to 21,6% in 2021, according to research by the International Labor Organization.
The Social Council will analyze all differences in earnings for the same work.
Amendments to the Social Council Act add new authority to this body of the Government, trade unions and employers to consider and take positions on issues related to equal pay for work of equal value.
"This will fully ensure compliance with Directive 2023/970, which contains solutions that ensure the strengthening of mechanisms for respecting the principle of equal pay for men and women for equal work or work of equal value; the prohibition of direct or indirect discrimination in terms of pay based on sex; and the transparency of wages in both the public and private sectors," the explanatory memorandum states.
The draft foresees that the Social Council will carry out activities aimed at raising awareness among employers, trade unions and the public about the need to eliminate discrimination in relation to equal pay for work of equal value. The Council will analyse the causes of gender-based wage differences and devise measures to assist in assessing wage inequality, based on data periodically submitted to it by employers.
Employers will have to explain methodologies if there is a difference in earnings of more than five percent for equal work or work of equal value among employees of different genders.
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