Employers could face hefty fines and disqualification from EU funding and public procurement procedures under a resolution passed by the European parliament in Strasbourg today if they are found to be paying women less than men for the same job.
According to the latest figures, women across the EU earn on average 16.4 per cent less than men with the gender pay gap varying between 4.4 per cent and 27.6 per cent in individual member states.
Women, consequently, have a higher risk of falling into poverty than men and this risk increases as they get older because their pensions are lower, according to Slovakian MEP Edit Bauer who drafted the resolution.
While Ms Bauer acknowledged the causes of the persistent pay gap were "complex and multiple" she said it was something that urgently needed to be addressed.
The resolution calls for companies to publish their salary scales and other benefits and to carry out regular pay audits. That information should be readily accessible by employees, trade unions and equality authorites, it says.
These authorities and monitoring bodies should have greater powers to enforce gender equality legislation, initiate investigations, impose sanctions where necessary and bring cases to court.
The resolution also calls for specific policies to make it possible to reconcile work with family and personal life such as high-quality, affordable childcare, flexible working arrangements and parental leave.
In her report, Ms Bauer said the growing trend whereby salaries are individually negotiated was a "worrying development" given it contributed to a lack of transparency surrounding payment structures.
"This leads to increased pay disparities among employees at similar levels and can result in the widening of the gender pay gap," she said.
"Lack of information and awareness among employers and employees about the existence of possible pay gaps within their company weakens existing legislation."
Data protection should not be used as an "excuse" for not publishing information on salaries, she added.
Irish MEP Sean Kelly told parliament he was "horrified" at the differences in pay between men and women for doing the same job.
"This isn't right. And it's not just in relation to pay. There is a lack of women on executive councils and boards. It's a major problem across the board and an end needs to be put to it. We need to introduce quotas and more specific policies on maternity leave and childcare," he said.
The resolution calls for member states to reinforce existing legislation by using sanctions such as penalties, which must include payment of compensation to the victim; fines in cases where information on salary structures is not provided to labour inspectorates or equality bodies; disqualification from EU subsidies and public procurement procedures; and the public identification of employers who breach the principle of equal pay for work of equal value.