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As of 7 June 2026, EU member states will be required to have the Pay Transparency Directive in national law. From publishing salary ranges in job ads to mandatory gender pay gap reporting, here is a full breakdown of what employers are now expected to do.
Equal pay between men and women has been a legal obligation across the European Union (EU) for decades. Yet the gender pay gap across the union stood at 13% in 2020 and has decreased only minimally over the last ten years. The gap is not simply a matter of women and men being paid differently for the same job. It is shaped by gender stereotypes, the perpetuation of the "glass ceiling" and the "sticky floor", the overrepresentation of women in low-paid service roles, and the unequal sharing of care responsibilities. On top of all of that, direct and indirect gender-based pay discrimination continues to play a part.
The COVID-19 pandemic made things worse, not better. Job losses were concentrated in low-paid, female-dominated sectors, and the crisis threw into sharp relief the structural undervaluation of work predominantly carried out by women, including health care, cleaning, childcare, social care, and residential care for older people. The socio-economic value of this work stood in stark contrast to its visibility and pay.
The core problem, as identified by a 2020 evaluation of existing EU equal pay provisions, is a lack of transparency. Workers do not have the information they need to bring a successful equal pay claim. Pay systems are unclear. The concept of "work of equal value" lacks legal clarity. The procedural obstacles facing victims of pay discrimination are significant.
Increased transparency, the evaluation found, would help reveal gender bias in pay structures and enable workers, employers, and social partners to take appropriate action. That finding set the stage for Directive (EU) 2023/970 of the European Parliament and of the Council, which was adopted to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms.
What the Directive lays down and who it applies to
The Directive lays down minimum requirements to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women, as enshrined in Article 157 of the Treaty on the Functioning of the European Union (TFEU) and the prohibition of discrimination set out in Directive 2006/54/EC.
It applies to employers in both the public and private sectors. It covers all workers who have an employment contract or employment relationship as defined by law, collective agreements, and/or practice in each member state, in line with the case law of the Court of Justice of the European Union.
This includes part-time workers, fixed-term contract workers, agency workers, platform workers, domestic workers, on-demand workers, trainees, and apprentices. For the purposes of pay transparency prior to employment, the Directive also applies to applicants for employment.
The Directive does not seek to override national wage-setting systems or collective agreements, nor does it prevent employers from paying workers differently on the basis of objective, gender-neutral, and bias-free criteria such as performance or competence.
Excerpts of the Directive are as follows - while the data relates to the EU, HRO believes it remains relevant and useful to our readers in Asia.
Pay transparency prior to employment
Applicants for employment have the right to receive, from the prospective employer, information about the initial pay or its range for the position concerned, based on objective and gender-neutral criteria. This information must also include, where applicable, the relevant provisions of any collective agreement applied by the employer. It must be provided in a way that ensures an informed and transparent negotiation on pay, whether in a published job vacancy notice, prior to the job interview, or otherwise.
Employers are prohibited from asking applicants about their pay during their current or any previous employment relationship. Job vacancy notices and job titles must be gender-neutral, and recruitment processes must be led in a non-discriminatory manner so as not to undermine the right to equal pay.
Transparency of pay setting and pay progression
Employers must make easily accessible to their workers the criteria used to determine pay, pay levels, and pay progression. Those criteria must be objective and gender neutral. Member states may exempt employers with fewer than 50 workers from the obligation specifically related to pay progression.
Right to information
Workers have the right to request and receive, in writing, information on their individual pay level and the average pay levels broken down by sex for categories of workers performing the same work or work of equal value. This request may be made directly or through workers' representatives or an equality body. Employers must respond within a reasonable period, and in any event within two months of the request being made.
Employers must inform all workers annually of this right and of the steps needed to exercise it. If information received is found to be inaccurate or incomplete, workers have the right to request further clarifications and receive a substantiated reply.
Importantly, workers cannot be prevented from disclosing their pay for the purpose of enforcing the principle of equal pay. Member states must put in place measures to prohibit contractual terms that restrict workers from sharing information about their pay.
Reporting on the gender pay gap
The Directive introduces a tiered pay reporting framework based on the size of the employer's workforce:
- Employers with 250 or more workers must provide the required information by 7 June 2027 and every year thereafter.
- Employers with 150 to 249 workers must do so by 7 June 2027 and every three years thereafter.
- Employers with 100 to 149 workers must do so by 7 June 2031 and every three years thereafter.
- Employers with fewer than 100 workers are not required to report, though member states may choose to extend the obligation to smaller employers, and voluntary reporting is permitted.
The information to be reported includes:
- the gender pay gap,
- the gender pay gap in complementary or variable components,
- the median gender pay gap,
- the median gender pay gap in complementary or variable components,
- the proportion of female and male workers receiving complementary or variable components,
- the proportion of female and male workers in each quartile pay band, and
- the gender pay gap between workers by categories broken down by ordinary basic wage or salary and complementary or variable components.
The accuracy of the information must be confirmed by the employer's management after consulting workers' representatives. The data must be communicated to the designated monitoring authority and may also be published on the employer's website or made publicly available in another manner.
Where gender pay differences cannot be justified on the basis of objective, gender-neutral criteria, employers are expected to remedy the situation within a reasonable period of time, in close cooperation with workers' representatives, the labour inspectorate, and/or the equality body.
Joint pay assessments
When pay reporting reveals a difference in the average pay level between female and male workers of at least 5% in any category of workers, and the employer has neither justified that difference on the basis of objective, gender-neutral criteria nor remedied it within six months of the pay reporting submission, the employer is required to conduct a joint pay assessment in cooperation with workers' representatives.
The joint pay assessment must identify, remedy, and prevent unjustified pay differences between female and male workers. It must include an analysis of the proportion of female and male workers in each category, information on average pay levels and complementary or variable components for each category, the reasons for any pay differences, any measures to address unjustified gaps, and an evaluation of the effectiveness of measures from previous joint pay assessments. It must also include information on the proportion of female and male workers who benefited from any pay improvement following return from maternity, paternity, parental, or carers' leave.
Employers must make the joint pay assessment available to workers and workers' representatives, communicate it to the monitoring body, and make it available to the labour inspectorate and equality body upon request.
Support for smaller employers
Member states are required to provide technical assistance and training to employers with fewer than 250 workers, and to the workers' representatives concerned, to facilitate compliance with the obligations under the Directive.
Keeping personal data in check
Pay transparency comes with a privacy obligation. Any personal data processed in connection with the right to information, pay gap reporting, and joint pay assessments must be handled in accordance with Regulation (EU) 2016/679. That data may not be used for any purpose other than the application of the principle of equal pay.
If sharing pay information under these provisions could directly or indirectly reveal the pay of an identifiable individual, member states may restrict access to that information.
In such cases, only workers' representatives, the labour inspectorate, or the equality body would be permitted to view it. Workers' representatives and equality bodies may then advise workers on potential claims under the Directive, without disclosing the actual pay levels of individual colleagues performing the same work or work of equal value. For monitoring purposes, however, the information remains available without restriction.
Keeping social partners in the conversation
Member States are required to take adequate measures to ensure social partners are effectively involved in discussions on the rights and obligations set out in the Directive, while respecting their autonomy and in line with national laws and practices. This involvement may take place upon the request of the social partners where applicable.
The Directive also calls on Member States to promote the role of social partners and encourage collective bargaining efforts aimed at addressing pay discrimination and its negative impact on the valuation of jobs predominantly performed by workers of one sex, while taking into account the diversity of national practices.
What else the Directive covers
Beyond pay transparency and reporting, the Directive also covers the defence of rights, procedures on behalf of or in support of workers, the right to compensation, among many other provisions. Click here to read the full Directive.
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