Gender equality in the workplace will be mandatory. The new law outrages employers

In Slovakia, we still do not know gender equality in employment. Apart from the fact that women here receive approximately 18 cents less for every euro earned compared to men, we still do not see women in high positions. This should be changed by a new law that will be the first to introduce gender equality as an obligation for large companies.

According to analysts, only a quarter of senior management positions are held by women and although this trend is slowly rising, women are still affected by factors such as motherhood or unpaid work. Employers, meanwhile, do not have to meet any quotas that would require them to hire women for certain positions. That is, for now. The new draft law should put an end to the old injustices.

Marián Kočiš, a macroeconomic analyst from Slovenská sporiteľňa, recently confirmed to us that „the pay gap between the sexes is not just an ethical problem“.

„It has many consequences, including the loss of human capital, lower consumption and lower economic growth. This represents a threat to the country's long-term prosperity“.

The Ministry of Justice of the Slovak Republic apparently began to realise this as well and came up with new legislation. Parliament is to discuss the draft law in the first reading in September. In October it should be discussed in the second and third readings, and it could take effect as early as 28 December 2024.

New quotas for large companies

„Listed companies should achieve a more balanced representation among the members of boards of directors and supervisory boards for the under-represented sex, which in practice is currently mainly women. The public nature of these companies represents a relevant reason for them to be regulated to a greater extent in the public interest,“ the Ministry of Justice writes in its explanatory report.

As EURACTIV Slovakia reports, the Ministry of Labour is also involved in the wording of the law. It is based on the European Union Directive, which sets out improving the gender balance among managers in listed companies.

Listed companies, i.e. companies whose shares are traded on regulated markets within the Union, will have to regularly report on gender diversity in their top bodies.

Under the new directives, companies must ensure a minimum 40-percent representation of women or men in non-executive management positions by 2026. If we also include executive positions in this number, the target value is reduced to 33 percent. Once a year, companies will have to submit a report to the Ministry of Labour, which will check how they are meeting these goals. The Ministry of Labour will also publish a list of companies that have met the requirements each year.

If companies do not achieve the set goals, they will introduce further measures. Failure to meet the reporting obligation may lead to sanctions, including fines. The new regulations do not apply to micro-enterprises and small and medium-sized enterprises, while the exact list of affected companies is not yet available.

Some employers are up in arms

The representatives of employers from the individual associations do not have the same opinion on the draft of the new law.

According to him, most of the companies to which the directive applies already comply with similar rules internally. This means that its implementation should not cause any major problem.

The Association of Employers' Unions and Associations (AZZZ) SR praised the directive for the fact that it does not deny listed companies the possibility of appointing the most qualified candidates as managers and provides them with a flexible framework and sufficiently long time to adapt.

Thanks to this, the individual companies should have sufficient room to determine for themselves how the set goals of the directive can best be achieved, taking into account internal rules and procedures concerning the staffing of top bodies.

According to the AZZZ, gender diversity could be a benefit for companies, since women bring new perspectives and experiences to management that are often different from those of men. On the other hand, there are opinions within the association that no external entities should interfere in companies' internal processes through regulations and dictate to them how management should be composed.

Klub 500 commented critically on the new law. „Instead of the European Commission devoting itself to the competitiveness of its economy, officials come up with such surrogate, nonsensical topics,“ said executive director Tibor Gregor.

Article taken from Startitup.sk.