Wage transparency: still a number of deficits
To mark Equal Pay Day on February 15, 2025, the global consulting firm Mercer has published the "Global Pay Transparency Report". The report concludes that while pay transparency is becoming increasingly important, there is still a lot of catching up to do in terms of implementing transparency requirements, particularly in Switzerland.
The "Global Pay Transparency Report" published by Mercer is based on responses from more than 1,000 companies worldwide. It essentially concludes that pay transparency is becoming increasingly important for companies around the world - not only to comply with local regulations in certain countries, but also to attract and retain employees.
Wage transparency only due to regulatory pressure?
According to the survey, for 77% of companies globally, compliance with regulations is the main reason for their pay transparency strategy. More than 50 percent see improving employee satisfaction and consistency with corporate values as important aspects. The values for Swiss companies are largely in line with the global results.
"It is time for companies to take action on pay transparency. Because fair pay is the second most important reason why employees choose a company. Employers should prioritize this fact in order to continue to operate successfully," says Mikolaj Jaszczuk, Principal Consultant Rewards at Mercer Switzerland.
Significant deficits
Although employers recognize the rising expectations around pay transparency, there is still a significant implementation gap. Less than a third (32 percent) of companies said they were prepared to meet global transparency requirements. In Switzerland, the figure was 50 percent.
Despite differences in pay transparency legislation, US companies are leading the way, with one in five companies having a pay transparency strategy in place. In Europe (excluding the UK and Ireland), only 7 percent of companies have a pay transparency strategy in place, although pay transparency legislation will come into force in the EU in 2026.
Main differences and limits of current equal pay requirements
The Swiss equal pay requirement, which is part of the revised Gender Equality Act, is a step in the right direction, but its one-off nature and lack of required transparency can significantly limit its effectiveness. In an article, Mikolaj Jaszczuk and Stefanie Schweitzer, Managing Consultant Rewards and Pay Equity, shed light on the differences between the Swiss Equal Pay Act and the EU Equal Pay and Pay Equity Directive. While Switzerland prescribes a one-off equal pay analysis, the EU relies on a continuous review to ensure long-term equality.
The Swiss Gender Equality Act, which was revised in 2020, requires companies with more than 100 employees to carry out a one-off equal pay analysis. This must be carried out using a scientifically validated method and audited externally. Companies that pass the audit do not have to carry out any further analyses. This means that there is no mechanism for regular monitoring and further development, which makes the law less effective.
In contrast, the EU directive obliges companies to carry out regular analyses - either annually or every three years, depending on the size of the company. It also promotes transparency by requiring companies to disclose salary information, which should lead to a fairer salary structure. Applicants are also entitled to information on salary structures, while employers are not allowed to ask about salary history. This reduces information asymmetries between companies and employees.
Should Switzerland revise its model?
The article from Mercer identifies the following four main differences between the Swiss regulation and the EU directive:
- Frequency of analyses: While Switzerland requires a one-off inspection, the EU relies on continuous monitoring.
- Method of analysis: Switzerland requires a scientifically validated regression analysis, while the EU prescribes a more general equal pay test.
- Scope and transparency: The EU attaches great importance to transparency by obliging companies to disclose salary information. Switzerland only requires internal communication of the results.
- Monitoring and control: There is no official monitoring body in Switzerland. However, the EU obliges member states to set up monitoring bodies to ensure compliance with the regulations.
The authors conclude that the one-off analysis in Switzerland is not sufficient to ensure sustainable equal pay. While the EU directive can bring about a far-reaching change in the salary structure, the Swiss model remains a one-off instrument with no long-term effect. It may therefore be necessary to adapt the Swiss regulations in order to keep pace with international standards and ensure fairer pay.
Source: Mercer
