Q&A

Q1: What is the main goal of the EU Pay Transparency Directive?
A1: The primary goal remains to combat the gender pay gap and strengthen the enforcement of the principle of equal pay for equal work or work of equal value between men and women. It achieves this through measures increasing pay transparency for workers and job seekers, and by creating reporting and remediation obligations for employers.
 
Q2: Why are these pay transparency rules necessary?
A2: Despite long-standing EU law on equal pay, a significant gender pay gap (around 13% across the EU when the Directive was agreed) persists. Pay secrecy is seen as a major barrier, preventing individuals from identifying potential discrimination. This Directive aims to empower workers with information and establish clear mechanisms for identifying and addressing unjustified pay differences.
 
Q3: What new rights do job applicants have regarding salary information?
A3: Employers must provide information about the initial pay level or range for a position before a job interview (e.g., in the job vacancy notice, or otherwise proactively beforehand). Crucially, employers are prohibited from asking candidates about their salary history in previous jobs. This prevents the perpetuation of past pay discrimination.
 
Q4: What rights do current employees have regarding pay information?
A4: Employees gain the right to request (personally or via worker representatives) information on their individual pay level and the average pay levels for workers performing the same work or work of equal value, broken down by gender.
 
Q5: What are the main obligations for employers under the Directive?
A5: Key obligations include:

• Pay Transparency (Pre-employment & Employment): Providing salary range information to applicants and pay level information to employees upon request

• Pay Structure Transparency: Ensuring employees have access to the criteria used to determine pay levels and pay progression (these must be objective and gender-neutral).

• Pay Reporting (for larger employers): Companies meeting employee thresholds must publicly report on their gender pay gaps

• Joint Pay Assessment: Conducting a deeper analysis and developing remedies if reporting reveals a significant, unjustified gender pay gap

• Remediation: Addressing any identified pay discrimination.

• Record Keeping: Maintaining necessary records to demonstrate compliance.

 
Q6: What is the 'Joint Pay Assessment' and when is it required?
A6: If a company's mandatory pay reporting reveals an average gender pay gap of at least 5% in any category of workers (doing the same work or work of equal value), and the employer has not justified this gap using objective, gender-neutral factors within six months of the report, they must conduct a joint pay assessment. This assessment involves cooperating with employee representatives/Unions to analyse the reasons for the gap and develop concrete remedial actions.
 
Q7: How is the Directive enforced, and what happens if pay discrimination is found?
A7: Enforcement relies on several mechanisms:

• Right to Compensation: Workers who suffer gender pay discrimination can claim full compensation, including back pay, lost opportunities, and non-material damages.

• Shifted Burden of Proof: If a worker presents facts suggesting discrimination, the employer must prove there was no violation of the equal pay principle.

• Legal Action: Employees can pursue claims through courts or designated authorities (like equality bodies). Worker representatives or equality bodies can also act on behalf of individuals.

• Penalties: Member States must implement effective, proportionate, and dissuasive penalties for non-compliance, including fines. The level and type will vary by country based on national implementation.

 
Q8: Who is covered by these rules?
A8: The Directive applies broadly to all employers and workers in both the public and private sectors within the EU. This includes full-time, part-time, fixed-term contract workers, and those working through temporary agencies. The definition of 'worker' should align with CJEU case law and national law.
 
Q9: How should employers determine "work of equal value"?
A9: Employers need systems to compare jobs based on objective, gender-neutral criteria. The Directive specifies using criteria such as skills, effort, responsibility, and working conditions. This requires having clear job evaluation and classification systems in place that can objectively assess and compare the value of different roles, irrespective of the gender of the jobholders.
 
Q10: What are the key deadlines for implementation?
A10: Deadlines:

• Transposition Deadline: EU Member States must incorporate the Directive into their national laws by June 7, 2026.

• First Pay Reporting:

  • Companies with 250+ employees: First report due by June 7, 2027 (covering the 2026 calendar year), then annually.

  • Companies with 150-249 employees: First report due by June 7, 2027 (covering 2026), then every three years.

  • Companies with 100-149 employees: First report due by June 7, 2031 (covering 2030), then every three years.

 
Q11: What kind of pay data will larger employers need to report?
A11: Reporting obligations (for companies with 100+ employees, phased as per Q10) require disclosure of:

• The gender pay gap (mean and median).

• The gender pay gap in complementary or variable components (e.g., bonuses) (mean and median).

• The proportion of female and male workers receiving complementary or variable components.

• The proportion of female and male workers in each pay quartile (dividing the workforce into four equal groups based on pay level).

• The gender pay gap between workers performing the same work or work of equal value, broken down by categories of workers.

 
Q12: What should employers be doing now to prepare for the Directive?
A12: With the June 2026 transposition deadline approaching, employers should proactively:

• Review and Audit Pay Structures: Analyse current pay practices and identify potential gender biases or unjustified gaps.

• Develop/Refine Job Evaluation: Implement or update objective, gender-neutral job evaluation and classification systems to compare roles based on skills, effort, responsibility, and working conditions.

• Prepare Data Systems: Ensure HR and payroll systems can accurately collect, analyse, and report the required pay data broken down by gender and worker category.

• Assess Pay Gaps: Conduct preliminary internal analyses to understand existing pay gaps and their potential justifications.

• Update Recruitment Processes: Remove requests for salary history and prepare to include pay ranges in job postings or provide them upfront.

• Train Staff: Educate HR personnel, managers, and potentially worker representatives on the Directive's requirements.

• Budget for Compliance: Allocate resources for system updates, potential pay adjustments, and legal advice.