🇪🇺 EU Pay Transparency Directive

EFFECTIVE DATE

The EU Pay Transparency Directive entered into force on June 7, 2023. EU member states are required to transpose its provisions into national law by June 7, 2026

Overview

The EU Pay Transparency Directive aims to enforce the principle of equal pay for equal work of equal value between men and women through enhanced pay transparency and enforcement mechanisms.

Key Provisions

Pay Transparency Prior to Employment

• Salary Information: Employers must provide job applicants with information about the initial pay or pay range for a position prior to the interview process. This ensures informed and transparent negotiations.

• Prohibition of Salary History Inquiries: Employers are prohibited from asking candidates about their current or previous remuneration.

Pay Transparency During Employment

• Right to Information: Employees have the right to request information regarding their individual pay level and the average pay levels, broken down by gender, for categories of workers performing the same work or work of equal value.

• Transparency of Pay Setting: Employers must make accessible the criteria used to determine pay levels and career progression, ensuring these are objective and gender-neutral.

Gender Pay Gap Reporting

• Reporting Obligations: Employers with at least 100 employees are required to report on their gender pay gap. The frequency of reporting is as follows:

  Number of Employees	First Report Due Date	Reporting Frequency
  250 or more	June 7, 2027	Annually
  150–249	June 7, 2027	Every 3 years
  100–149	June 7, 2031	Every 3 years

• Joint Pay Assessments: If a gender pay gap of 5% or more is identified and cannot be justified on objective, gender-neutral grounds, employers are required to conduct a joint pay assessment in cooperation with worker representatives.

Enforcement and Remedies

• Compensation: Employees who have suffered from pay discrimination are entitled to compensation, including full recovery of back pay and related bonuses or payments in kind.

• Burden of Proof: In cases of alleged pay discrimination, the burden of proof shifts to the employer, who must demonstrate that no discrimination has occurred.

• Penalties: Member states are required to establish penalties for infringements of the equal pay rule, which may include fines.

Implementation Timeline

TIMELINE

June 7, 2023
Directive enters into force

By June 7, 2026
Member states must transpose the directive into national law

June 7, 2027
First gender pay gap reports due for employers with 250 or more employees and those with 150–249 employees

June 7, 2031
First gender pay gap reports due for employers with 100–149 employees

Member State Transposition Status

🇧🇪 Belgium

• Status: Transposed
• Details: On September 12, 2024, the French Community of Belgium (Fédération Wallonie-Bruxelles) transposed the directive into law, applying primarily to public sector employers under its jurisdiction.

🇸🇪 Sweden

• Status: Draft legislation published
• Details: In May 2024, Sweden published draft legislation to implement the directive, building upon existing equal pay legislation.

🇵🇱 Poland

• Status: Draft bill proposed
• Details: On December 5, 2024, Polish parliament members published a draft bill to transpose parts of the directive, aligning with provisions on pay transparency during recruitment and employee rights to information on pay levels. Employers must report on mean and median gender pay gaps, pay quartiles, bonus disparities, and percentages of men and women receiving bonuses. Reporting will initially be annual for employers with 250+ employees, shifting to every three years for smaller companies.

Ireland 🇮🇪

• Status: Draft bill published
• Details: On January 15, 2025, the Irish government published a draft bill addressing pay transparency provisions of the directive, requiring salary ranges in job advertisements and prohibiting employers from requesting applicants' salary histories.

🇳🇱 Netherlands

• Status: Draft legislation published
• Details: On March 27, 2025, the Dutch government published draft legislation to transpose the directive, amending existing laws to align with the directive's requirements. Reporting must include mean and median pay gaps, pay distribution across quartiles, and bonuses. Companies with persistent gaps above 5% must perform joint pay assessments and develop action plans with employee representatives.

note

Note: Other EU member states are in various stages of the transposition process, with some establishing working groups or drafting legislation. The directive mandates that all member states transpose its requirements into national law by June 7, 2026.

Preparation Steps for Employers

Employers are advised to take the following steps to ensure compliance with the directive:

1. Conduct Pay Audits: Assess current pay structures to identify and address any unjustified gender pay gaps.

2. Review Recruitment Practices: Ensure that salary ranges are provided to job applicants and that questions about salary history are eliminated from the recruitment process.

3. Update Policies: Develop and communicate clear, objective, and gender-neutral criteria for pay and career progression.

4. Establish Reporting Mechanisms: Implement systems to collect and report required data on gender pay gaps in accordance with the directive's timelines.

5. Train HR and Management: Educate human resources personnel and management on the directive's requirements and the importance of pay transparency and equity.

By proactively addressing these areas, employers can not only comply with the directive but also promote a fair and inclusive workplace culture.