In one of our previous blog posts, we talked about the role anonymous recruitment could play in preventing ethnic discrimination in the Finnish job market. In this blog, I suggest that pay surveys adopted from gender equality legislation could be useful tools in the diversity and inclusion efforts of Finnish companies.
What are pay surveys?
While discrimination of all kinds is illegal in Finland, Finnish legislation pays particular attention to the equality between men and women.
The purpose of the Act on Equality between Women and Men is to prevent gender-based discrimination, promote equality between women and men, and improve women’s standing, especially in the labor market.
A tool in the Act used to achieve those goals is the pay survey. It is a part of the gender equality plan every employer employing over 30 employees has to draft at least every two years.
The most recent reiteration of the law from 2015 states that gender equality plan must include:
- an assessment of the gender equality situation in the workplace, including a pay survey;
- measures planned for promoting gender equality and achieving equality in pay; and
- a review of previous measures and their results.
The law furthermore details the purpose of the pay surveys and also tells what employers should do if unexplained wage differences come up.
The Act states that the pay survey is used to ensure that there are no unjustified pay differences between women and men who are working for the same employer, and who are engaged in either the same work or work of equal value.
What needs do these pay surveys address?
Pay surveys were first mentioned in the 2005 version of the Act, but the current version is from 2015. According to Anja Nummijärvi, the 2005 legislators intended pay surveys to be tools to help actively recognize and eliminate gender-based wage discrimination.
As Kevät Nousiainen explains, individual employees bare the burden of proof when it comes to proving wage discrimination in Finland. That requires knowing what coworkers are making.
In the public sector, wage information is public but in the private sector, it is not. One can of course always ask what one’s coworker is making, but Finns are not particularly eager to divulge that information.
Getting access to coworker’s pay information in cases when one suspects wage discrimination is possible in Finland, but it’s a cumbersome and often lengthy process. Legislators intended pay survey to provide comparable information for the personnel. This would then reduce if not completely eliminate the need to access the wage data of individual employees.
How have pay surveys fulfilled their intended purpose?
In order to function as intended, employers must complete surveys in a way that exposes unexplained wage discrepancies. The few analyses that have been conducted on these surveys reveal that there is still much to improve in this respect.
The Ombudsman for Equality reviewed equality plans of 60 municipalities and 20 large companies between 2016 and 2018. Both the Ombudsman and Anja Nummijärvi, who presented her own conclusions of these reviews, concluded that most of these pay surveys need improvement.
Their basic criticism is that employers should pay closer attention to the purpose of these pay surveys. They are supposed to reveal possible wage discrepancies between women and men who do the same or equal work. That purpose should guide employers in how they form comparison groups. Each employer should look at their own salary model. They should determine what comparison methods and employer groupings would most likely reveal possible discrepancies with their model.
The Ombudsman and Nummijärvi’s criticisms reveal that pay surveys are only as effective as employers want them to be. Despite this, I would argue that they could also be used to reveal other types of wage discrimination.
Pay surveys, diversity & inclusion, and good places to work
The law requires that companies with over 30 employees have to draw an equality plan at least every two years. Pay survey is a mandatory part of such a plan. The law also states that the equality plan must be completed in cooperation with employee representatives. The law requires that employees must be informed about the gender equality plan. These plans are thus also a possibility for the company to show their employees that they are taking gender equality seriously.
Current Finnish legislation doesn’t require companies to expand this survey to include examinations of other possible sources of discrimination. But the law doesn’t prevent that either.
Naturally, conducting pay surveys that focus on things such as nationality requires that the companies employ enough international employees. These surveys cannot reveal the wage information of individual employees. Thus they require large enough group sizes to allow comparisons.
Privacy legislation also restricts the amount and nature of information employers are allowed to collect about their employees. Employers are, however, responsible for making sure that international employees have the right to work in Finland. Thus they do collect at least some sort of nationality or citizenship information on their employees. This could form the basis of pay comparisons.
Thus, routinely executed pay surveys could be a way for companies to show that they take diversity issues seriously, that they go the extra mile to ensure that they treat everyone equally. They could also use these plans to showcase concrete steps they are taking towards inclusion.
And what would interest their diverse workforce more than the knowledge of being paid fairly?
This blog is an offshoot of a presentation I gave to the International Working Women of Finland on gender-based wage discrimination in Finland on August 26, 2020.
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