Written in collaboration with Mary Carey, a member of The Blog team.
Let’s get loud (thank you J-Lo). This seems to be the mood right now. There was a lot of noise around International Women’s Day (IWD) 2025—a global day celebrating the social, economic, cultural, and political achievements of women—in Luxembourg, in Europe, and around the world.
The theme was a challenge to “accelerate actions”, and the time seems exactly right to amplify and fortify efforts towards a level playing field and a fair set of rules for the game of life (something that is bound to be good for men as well).
Despite significant advancements, the question lingers: How far have women truly come? The fight for equal pay and equal play is both a celebration of progress and a reminder of the persistent gaps that remain. It underscores the importance of initiatives such as International Women’s Day, which not only honours achievements but also shines a spotlight on the challenges that remain.
On 4 March, along with the American Chamber of Commerce in Luxembourg and Baker McKenzie Luxembourg, we organised for the eight consecutive year, a celebratory event for International Women’s Day as an iconic moment to reflect on how far we want to push the gender needle in today’s society.
The focus? None other than the upcoming regulatory game-changer: pay transparency. This initiative promises to boost equal opportunities for everyone and act as a true accelerator for change. The format of the IWD event changed this year, allowing the audience to experience a compelling lecture on pay transparency, followed by an interactive debate among inspiring specialists.
Sabrina Bodson, Employment Counsel at Baker McKenzie Luxembourg, delivered the keynote speech. She gave an insightful presentation on pay transparency impacting all employers in both private and public sectors with enhanced obligations as from a headcount of over 100 employees.
In this blog, we offer some insights on the topic of pay transparency, as well as some of the comments and perspectives of our distinguished panel which consisted of Aline Muller, CEO of Luxembourg Institute of Socio-Economic Research (LISER), Daniela Klasen, Country Head of RBS International Luxembourg, and Sébastien Garcin, CEO of YZR and author of “Heracles”, a newsletter for men who want to take action for gender equality, with tips and tricks on how to become a good ally.
Speaking of legislation: pay transparency is coming
The EU Pay Transparency Directive, officially known as Directive (EU) 2023/970, was enacted on 10 May 2023, and published in the Official Journal of the EU on 17 May 2023. It came into force on 7 June 2023.
This Directive is designed to enhance the principle of equal pay for equal work or work of equal value between men and women by introducing stringent pay transparency measures and enforcement mechanisms. It mandates transparency and reporting obligations for employers in both public and private sectors, ensuring that all employees and job applicants are treated fairly during selection processes. And who doesn’t like fairness, right?
Employers are required to disclose information related to pay levels, pay structures, and provide justifications for pay differences that are based on non-gender related factors. The Directive aims to close the gender pay gap and promote fairness in the workplace by empowering employees with the knowledge to spot and report unjust pay disparities. It also includes provisions for penalties and corrective actions for non-compliance, thereby reinforcing the commitment to wage equality across the European Union.
Key changes:
- Enhanced pay transparency
- Obligations for employers to report remuneration information
- Coverage includes both current employees and job applicants
Key benefits:
- Promotes gender equity in the workplace
- Ensures fair hiring practices
- Helps in reducing the gender pay gap
Pay transparency: a catalyst or just another compliance layer?
Proponents of pay transparency argue that it acts as a powerful catalyst for closing the gender pay gap and fostering a culture of trust within organisations. For instance, companies like Buffer have implemented complete salary transparency, which has led to increased employee satisfaction and enhanced trust among team members.
By openly sharing pay information, organisations can highlight and address discrepancies, promoting fairness and equality. Moreover, transparency can pressure companies to ensure their compensation practices are justifiable and competitive, attracting top talent and driving better performance.
On the other hand, critics suggest that pay transparency might merely add another layer of compliance without addressing the root causes of pay inequality. For example, some argue that disclosing salaries could lead to resentment and demotivation among employees who feel undervalued despite comparable performance.
Furthermore, companies may face challenges in maintaining privacy and discretion, particularly in cases where pay disparities are influenced by legitimate and objective factors such as experience, age, education, among others. Critics also warn that the administrative burden of maintaining transparent pay structures could divert resources away from other crucial diversity and inclusion efforts.
Emily’s story
This criticism is reflected in Emily’s (fictional) story, but it is in fact the lack of transparency that has led to her feeling undervalued and unmotivated.
A diligent marketing manager at a mid-sized company, Emily had been with the company for five years, consistently exceeding her targets and contributing innovative ideas. Despite her dedication and hard work, she felt undervalued. During a casual conversation with a colleague at a company event, Emily discovered that a recent hire in a similar role, with less experience and fewer responsibilities, was earning significantly more than she was.
After this revelation, she began to question the company’s values and her own worth within the organisation. The lack of pay transparency had created an environment where discrepancies in compensation were hidden, leading to feelings of frustration and resentment. Emily’s productivity and engagement dwindled, not because of the workload, but because she no longer felt fairly compensated for her efforts when compared to her peers.
The company’s failure to maintain pay transparency not only resulted in Emily’s demotivation but also risked losing a talented and valuable employee who once felt passionate about her work.
Google settles US118m gender pay discrimination lawsuit
Having legislation in place ensures companies uphold equitable practices and face consequences if they don’t. Consider the case of Google, who in June 2022 reached a settlement in a class-action suit and subsequently agreed to pay US118m to over 15,500 female employees. The female workers spanned over 200 job titles and dated as far back as 2013.
The case began in 2017 when three now-former employees filed complaints alleging Google underpays female workers, citing a violation of California’s Equal Pay Act. Also included in the complaints were mentions of unequal access to career opportunities, which in turn led to smaller bonuses in comparison to male counterparts.
Sebastien’s story: pay transparency in action
Let’s switch to the real-life example of the aforementioned Sébastien Garcin, CEO of YZR. During our conversations with him, Sébastien emphasised the importance of gender equality in the tech industry and shared his approach to achieving a 50/50 gender balance.
This includes the challenging aspect of attracting women to male-dominated industries and the need for creative solutions, such as inclusive job offers and the targeting of specific schools, sometimes outside of Europe! He also strongly believes in the role of men in promoting gender equity and the positive impact it has on their mental and social health (and he himself is the embodiment of these principles).
Sébastien is a strong advocate for pay transparency within organisations, believing it fosters fair representation and empowers women in salary negotiations. He has implemented this approach in his own firm by conducting proactive salary assessments every six months to ensure pay equity, eliminating the need for employees to request raises.
Playing devil’s advocate, we took on the persona of the pay transparency critic and asked Sébastien directly: how does someone who has done outstanding work is rewarded for their merit? He gave us an immediate response.
The company has four key reward triggers:
- Fixed wage increases: for employees who have crossed a professional milestone or who are given a wider scope.
- Variable share: it’s a portion of a certain amount per year, paid 50% in June and 50% in January, depending on individual objectives.
- Exceptional bonus: for employees who have had a significant achievement.
- Paid rest days: a very useful option when the company is short on cash.
One of the main reasons pay transparency took centre stage at our IWD event is the EU Pay Transparency Directive. Companies need to start identifying and addressing wage gaps now to prevent future issues, implement corrective measures, and avoid sanctions.
To support this, our firm offers services to help organisations understand the regulatory requirements, assess potential risks, and implement strategies that align with the directive—ultimately fostering fair pay practices.
But wait, we read there is no pay gap in Luxembourg
Part of the conversation around IWD—both before and after—was driven by statistics. For example, Eurostat reported that in 2023 women in the EU earned, on average, 12% less than their male colleagues in gross hourly wages. Progress in the EU has been steady, with the gender pay gap still as high as 12.7% in 2021. The United Nations estimates that the pay gap stands at 23% globally, with women earning only 77% of men’s salaries for equal work.
Another headline that many people may have seen is ‘Luxembourg, the only EU country to achieve parity’. According to Eurostat, the Grand Duchy reached a -0.9% pay gap in favour of women in 2023, making it the only EU country to achieve parity. The progress has been rapid: the gap was 10.7% in favour of men in 2006, narrowing to 1.4% in 2018, before finally shifting in women’s favour. No problem then, right?
Well, no. The United Nations writes: “…official statistics from Luxembourg (STATEC) qualify this success: “The gap is still tilted in favour of men when annual earnings are taken into account, given that a small percentage of men earn very high salaries and bonuses, and that women work more part-time.”
Just ahead of International Women’s Day, Eurostat reported that women hold only 22% of managerial positions in Luxembourg, placing the country at the bottom of the European league for female management, ahead of Croatia and the Czech Republic but trailing behind Sweden, Latvia, and Poland.
Eurostat data highlights mixed progress across Europe, with an upward trend in female management representation across the EU, where women held 34.8% of managerial positions in 2023, an increase from 31.8% in 2014. These statistics raise concerns about the progress of gender equality in Luxembourg, even as other EU member states show significant advancements.
Additionally, in 2024, women made up almost 30% of boards among Women in Finance Charter signatories, up from 27% in 2023, showing progress towards the targets set by the signatories. But representation remains limited, with women still making up less than a third of board members.
Similarly, in its recent review of Luxembourg on 7 February 2025, the Committee on the Elimination of Discrimination against Women (CEDAW) welcomed the end of the wage gap, while still noting that poverty persists among working women.
One specialist pointed out that, despite having the highest GDP per capita in the EU, Luxembourg has a poverty rate of 13.5% among working women, mainly affecting single-parent families. Nearly one woman in three (30.9%) works part-time, compared with 7.1% for men. This disproportion, as well as the fact that the number of years worked is lower than for men due to maternity, ultimately affects pension levels.
But 30% isn’t enough
This is precisely why targets are set towards achieving a 50/50 gender balance in companies, particularly in male-dominated sectors, which are prominent in Luxembourg.
But any mention of targets often sparks the quota debate, which quickly spirals into the meritocracy argument —the idea that people should be hired for their talent, not simply because they are women (or belong to any other minority group). Let’s be clear: no one is proposing hiring unqualified candidates. No business or government would survive long if that were the case, which it isn’t. The reality is that there are plenty of highly skilled, talented women who are excellent candidates for the job.
During our event, Daniela Klasen made an interesting observation about board composition: many board members are former CEOs— who tend to be men. She suggested to invite specialists from areas like risk and compliance into the makeup of the boards, where more women are represented. This approach would naturally increase gender diversity while also enriching board discussions by incorporating strategic expertise beyond traditional C-level roles.
In a Financial Times article published on 9 March 2025, entitled ‘The sobering new state of feminism,’ journalist Pilita Clark writes, “ A recent study by the Global Institute for Women’s Leadership and Ipsos found that while global attitudes toward gender equality improved slightly, nearly half of the global population still believes that efforts for female equality have gone far enough, despite persistent disparities like the gender pay gap and low female representation in parliaments.”
“PwC data highlights that in wealthy OECD countries, it will take over 46 years to close the gender pay gap, with European financial services boardrooms seeing a widening pay gap for women. (…) The study also revealed a concerning divide among younger generations, with a significant proportion of young men believing feminism has gone too far, reflecting a broader societal divide that threatens to hinder further progress towards gender equality.”
Still don’t believe there is work to be done?
At time of writing this blog, 11 March 2025, the UN reported that, in light of increasing opposition to women’s rights, UN Secretary-General António Guterres delivered a compelling address to civil society representatives during a town hall meeting, part of the ongoing Commission on the Status of Women. Guterres was quoted as saying that, “A surge in misogyny, and a furious kickback against equality threaten to slam on the brakes, and push progress into reverse. Let me be clear: This is unacceptable, immoral, and self-defeating. We must stop it – and we must stop it together.”
So where does this leave us—men and women alike? How can we accelerate actions to create a more equitable playing field? How can we eliminate these persistent barriers to equal pay and equal opportunity? How can we change the mindsets of people and behaviour in and out of the workplace. How can we onboard the next generation into the workplace with a deeper understanding and appreciation of both financial and non-financial benefits of such an equitable environment? These questions, among others, were at the heart of the panel discussion at our event.
Aline Muller, representing the researchers’ view, argued that pay transparency can be a catalyst for gender equity, but sometimes it can go the other way, especially when salaries and career histories are overly disaggregated. She mentioned that measuring the pension gap can provide a full picture of disparities between men and women.
Recent figures from the Chamber of Employees (Chambre des salariés – CSL) underline this stark reality: 80% of minimum pension recipients are women, and on average, women’s pensions are 36% lower than men’s, compared to a 25% gap across Europe. In fact, Luxembourg ranks among the most unequal countries in this regard, behind only Malta and the Netherlands.
Aline Muller urged policymakers to carefully evaluate the impact of their actions and regulations on gender equity. She emphasised the need for accurate data and analysis to inform stakeholders and ensure that well-intended measures deliver meaningful results.
Of course, change doesn’t happen overnight. But this year’s IWD panel discussion certainly offered plenty of food for thought and concrete suggestions to accelerate gender and pay equality across industries. Key takeaways include:
- Inclusive hiring practices: for instance, write job offers in a more inclusive way (for example, focus on the key competencies since women tend to be more demanding when assessing themselves in comparison to men) and expanding your geographical scope when targeting specific schools to attract more female applicants.
- Training and awareness: Educate men on their role in gaining awareness on their privileges in the workplace, promoting gender equity and creating a more inclusive, supportive work environment that is a truly safe space for professional development.
- Role models and mentorship: Encourage men in leadership positions to act as role models and mentors for the next generation entering the workforce.
- Actions speak louder than words: Women should learn how to ask for promotions, a pay rise, and apply for roles beyond their current experience level—just like men do. The worst outcome is a ‘no’.
- Address gender issues: It’s not about ‘women against men’, but rather ‘masculinity against inclusivity’.
- Expand professional progression pathways: Recognise the value of depth of expertise alongside hierarchical advancement.
- Network, network, network: Many opportunities arise through connections—so it’s important to be proactive in building relationships.
International Women’s Day should be every day. Until then, we look forward to continuing the conversation—and seeing you next year.
What we think
Over the years, one truth remains unchanged: the deepest divide—and the most staggering missed opportunity—is the gender gap. The pay gap is merely its most visible symptom. How can we justify standing still for yet another decade? Progress waits for no one. Leaders are dealers in hope—so stay firm, take action, and be the change.
The EU Pay Transparency Directive is reshaping how organisations report and justify pay differences but pay transparency isn’t just a legal obligation—it’s a step toward fairness and trust. How will you respond?
