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The new EU regulations aim to increase transparency around salaries and reduce gender pay gaps. These "equal pay directives" came into force in June of this year, and work is underway to incorporate them into Norwegian law. At E24, we recently read about consultancy firm Variant, which practices an open salary model where everyone knows what everyone earns.

This is calculated using a salary calculator available on the company's website. Increased transparency about salaries is a trend now spreading across Europe. The new EU rules include employees' right to know the starting salary in the company they are applying to, the average salary for colleagues in similar roles, and the prospective employer must no longer ask about your current salary.

The main reason the EU introduced this directive is to reduce gender pay gaps. The Norwegian Trade Union Confederation (LO) supports introducing these new rules into Norwegian law, believing it will make it harder to discriminate against employees. However, the Norwegian Confederation of Professional Employees (NHO) is more skeptical, pointing out that it will require more reporting.

Many of the requirements in the EU directive are already in Norwegian law, such as the requirement for job ads and titles to be gender-neutral. Some doubt whether this reporting will make pay gaps smaller. Many countries have been ahead of the EU directive, implementing rules for greater transparency around companies' salary levels.

According to a Financial Times analysis, gender pay gaps have decreased in 31 of 36 countries since 2014. The median country among those required to implement the directive reduced the gap by 25%, while the reduction was 17% for countries not required to do so. Not a huge difference, then. In Britain, and partially in France, Switzerland, and Denmark, large companies saw benefits from broad salary reporting.

In Austria and Sweden, there was very little or no effect on pay gaps after introducing broader and more transparent salary reporting. Researchers also found that in Britain and Denmark, male wage growth slowed down, while women's wages did not see the lift they might have expected. This means pay gaps were reduced because men's wage growth was dampened, not because women saw higher wages.

While researchers don't know the employers' motivations here, it suggests that salary disclosure gives bosses stronger arguments to keep salaries the same. This comes as the world becomes more volatile, interest rates remain higher for longer, and companies and people at large feel the economy is tight. The good news is that young people answered for the first time in 11 years that pay is the most important factor when they apply for a job.

So, even if it may be overly optimistic to think a new EU directive will give you the pay raise you're hoping for, there's reason to believe the equal pay directive will have consequences for labor life and businesses here in the north.