EU Pay Transparency Directive Implementation
EU member states have until June 7, 2026 to implement the EU Directive on Pay Transparency (EU Directive 2023/970) into national legislation. The Directive is aimed at promoting the principle of equal pay for equal or equivalent work for men and women. The main principles of the Directive are summarized below.
Right to information
Employees must be given the opportunity to obtain information on the average salaries of colleagues who perform equal or similar tasks and, during the job interview, to clearly understand salary ranges.
Employers will be required to share average employee pay grids with employees who request them, but not the contents of a specific colleague's payslip. Employers will have up to two months to respond in writing to such requests by providing the data disaggregated by gender, also explaining the criteria for determining salary.
During the selection process, the salary offered for a new job must always be included in the job advertisement and the employer may not ask candidates for his or her previous salary level.
Obligations for employees established by the Directive
The rules change depending on the number of employees. Employers with more than 250 employees will be obliged to draw up an annual report on their gender pay gap starting from June 7, 2027 and subsequently for each year. For employers with:
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from 150 to 249 employees, the report will be required every three years and starting from 7 June 2027;
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from 100 to 149 employees, the report will be required every three years and starting from 7 June 2031; and
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under 100 employees, reporting will be voluntary.
Employers with a pay gap of more than 5% will be required to implement measures to correct the figure and undertake a joint assessment of wages with representatives of trade unions to remove any unjustified disparity.
Employers who do not comply will face administrative sanctions, but above all, will risk losing credibility vis-à-vis their employees, potential candidates, customers and investors.
Opportunities for employers
The benefits of pay transparency for employers can be to improve reputation, staff retention and avoid the risks of possible wage discrimination and unjustified inequalities.
One of the key issues will be understanding how “equal work or work of equal value” will be identified to have the same salary.
In theory, each person should receive a fair salary and be rewarded for his or her skills, without discrimination.
Action points in order to ensure compliance
Employers are already preparing for the implementation of the Directive into national legislation through:
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carrying out internal audits to identify and correct any disparities;
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identifying precise remuneration criteria for salary and professional growth;
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adopting complete and comprehensible systems (matrices and/or software programs) to provide clear and precise information on compensation and bonuses to employees who request such information:
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Informing employees about the new regime being implemented by the Directive and the resulting changes made by the employer;
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training administrative staff and HR managers on the new procedures for managing employee remuneration data and on the new approach with respect to selection processes;
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updating job vacancies; and
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beginning a constructive dialogue with trade unions to remove any income discrepancies by introducing corrective measures.
April 15, 2026
Avv. Elena Aliani
SWOT Collaborator