The EU Pay Transparency Directive: What employers need to know in 2026.
The EU Pay Transparency Directive—officially known as Directive (EU) 2023/970—is a binding framework that requires employers to disclose pay and demonstrate pay fairness. Its goal is to close the gender pay gap through clear pay structures, salary range disclosure, and enforceable employee rights to information. EU member states must transpose the Directive into national law by 7 June 2026. This summary covers requirements, timelines, and penalties for non-compliance.
What is the EU Pay Transparency Directive?
The EU Pay Transparency Directive is a landmark pay equity law passed in 2023, with full application required by June 2026. Member states must comply with the EU Directive on equal pay and pay transparency, which requires employers to publish gender pay gap statistics and disclose salaries during recruitment. Employers must also comply with employee requests for pay data and undergo audits if reports or data reveal pay disparities. Specifically, an unexplained gender pay gap of 5% or more within a category of workers triggers a joint pay assessment.
The goal of the European Union Pay Transparency Directive is to strengthen remuneration transparency and close gender pay gaps. Employees will have access to their own pay level and to average pay levels for comparable roles, broken down by gender. They can also request the criteria used to set pay and progression, giving them a clear basis to challenge unfair disparities.
What are the key requirements of the EU Pay Transparency Directive?
The EU Pay Transparency Directive sets clear, enforceable standards for how employers disclose pay and ensure fairness across roles. The requirements establish common rules for pay transparency laws across all EU member states, including salary range disclosure, employee rights to information, and targeted pay audit requirements to address pay gaps.
Key requirements at a glance:
- Pay structure disclosure: Employers must provide salary ranges or pay bands in job postings or before an interview, and for internal promotions. They cannot ask about salary history when recruiting.
- Gender pay gap reporting: Employers with at least 100 employees must report on gender pay gaps. Those with 250 or more report annually; those with 100 to 249 report every three years. Employers with 100 to 149 employees have until five years after the effective date to begin reporting.
- Right to pay information: Employees can request average pay levels for workers doing the same or equivalent work, broken down by gender, plus the criteria used to set pay.
- Joint pay assessments: Where an unexplained gender pay gap of 5% or more exists within a category of workers, employers must carry out a joint pay assessment and take corrective action.
- Transparency in criteria: Pay and progression must be based on objective, gender-neutral criteria, explained on request.
- Protection against retaliation: Workers may discuss pay without penalty.
How EU member states are adopting the Directive.
All 27 EU member states must implement the new EU Pay Transparency Directive requirements by June 2026. However, many countries have already passed similar or stricter laws, in some cases ahead of the Directive's deadline.
The following overview summarises countries that already meet, or plan to meet, key requirements.
Belgium
Directive Implementation Status
Transposed into law.
Summary of Current Laws
In addition to Directive requirements, Belgium enforces fair assessments of pay progression for employees returning from family leave.
Effective Date
1 January 2025
Denmark
Directive Implementation Status
In process.
Summary of Current Laws
The Consolidation Act on Equal Pay to Men and Women requires gender pay gap reporting for employers with 35+ employees.
Effective Date
August 2006
France
Directive Implementation Status
In process.
Summary of Current Laws
Employers with 50+ employees must annually measure and report gender-based pay inequality.
Effective Date
September 2018
Germany
Directive Implementation Status
In process.
Summary of Current Laws
Employers with 200+ employees must provide pay structure information upon request; employers with 500+ employees must conduct gender pay gap reporting every 3–5 years.
Effective Date
June 2017
Ireland
Directive Implementation Status
In process.
Summary of Current Laws
Some Irish laws exceed Directive requirements; employers with 50+ employees must report gender pay gaps annually.
Effective Date
June 2025
Norway (EEA-associated, not EU)
Directive Implementation Status
In process.
Summary of Current Laws
The Equality and Anti-Discrimination Act requires employers with 50+ employees to submit annual gender pay equity reports.
Effective Date
January 2018
Poland
Directive Implementation Status
Almost fully implemented.
Summary of Current Laws
New legislation imposes early requirements such as pay range disclosure and non-discriminatory recruitment; gender pay gap reporting will follow the EU Directive timeline.
Effective Date
December 2025–June 2026
Sweden
Directive Implementation Status
Nearing full implementation.
Summary of Current Laws
Sweden will transpose all Directive elements, with stricter rules applying to employers with 10+ employees.
Effective Date
January 2026 (tentative)
Notably, despite the United Kingdom no longer being bound by the Directive post-Brexit, it continues to maintain strong gender pay gap reporting laws. The Equality Act of 2010 requires employers with at least 250 employees to calculate, disclose, and report gender pay gaps annually.
What employee rights are introduced under the directive?
Employee rights are the focus of the Directive. Most notably, employees will have full visibility into gender-based pay gaps within their organisations, including how salaries are structured, how progression is determined, and how pay practices align with objective, gender-neutral criteria.
Employees can request pay data broken down by gender or comparable role, so they can compare it with their own pay and judge whether differences are justified by experience, performance, or other legitimate factors. Employers cannot retaliate against an employee for requesting this information or discussing pay with colleagues. Where an unexplained gap of 5% or more is found, employers must investigate and complete a joint pay assessment with employee representatives.
The Directive also brings transparency into recruitment: employers must share salary or pay information in job postings or before an interview. This helps prevent negotiations anchored to salary history and gives candidates a fairer starting point.
How the Directive affects recruitment and job postings.
Pay transparency improves recruitment by building trust between candidates and employers. The Directive weaves salary transparency laws and pay disclosure requirements into the earliest stages of recruitment. Covered employers must include salary range disclosures in job postings or before interviews take place, so candidates know exactly what to expect before they progress.
In practice:
- Job postings must include salary ranges or information about where to find them publicly.
- Employers cannot ask a candidate about their past salaries.
- Job titles, descriptions, and evaluation criteria must be gender-neutral.
What penalties exist for non-compliance with the Directive?
Penalties will vary by member state, as each country can impose its own penalties for covered organisations, enforced by the member state's designated authority.
In general, employers can expect financial penalties per violation, often proportionate to company size, and may be required to pay arrears to employees who were underpaid because of unjustified gender-based disparities.
While the EU equal pay legislation doesn't mandate public disclosure of non-compliant organisations, member states may opt to make violations public. Public naming could damage an employer's reputation, especially for consumer-facing brands or those competing for top talent in regulated industries.
Pay reporting obligations can be complex for organisations of any size, but covered employers must comply with the upcoming European Union pay equity legislation regardless. Workday can simplify compliance for global organisations with built-in tools for compliance tracking and audit automation.
FAQs about the EU Pay Transparency Directive.
Member states must comply with the EU Pay Transparency Directive regulations by 7 June 2026. Gender pay gap reporting obligations then phase in, beginning 7 June 2027. Many member states have already started to implement the rules.
Employers with at least 100 employees in a member state are required to comply with these regulations. This includes organisations headquartered outside the EU—including in the UK—that have 100 or more employees in a member state.
Salary disclosure requirements ensure that employers provide employees and candidates with access to salary information. The EU Pay Transparency Directive requires salary band transparency in job postings or before a candidate is interviewed.
The Directive requires employers to include a pay structure disclosure or salary band disclosure in job postings. These disclosures must align with an internal compensation transparency framework that uses objective, gender-neutral criteria.
Employees can request pay data broken down by gender and role, understand the criteria behind pay progression, and discuss pay without penalty.
Employers with 250 or more employees report annually; those with 100 to 249 report every three years.
Companies with fewer than 100 employees aren't required to report under the Directive. However, member states can choose to impose additional requirements, especially in sectors with known pay disparities.
No—the UK is no longer part of the EU. However, the UK has its own rules: under the Equality Act 2010, employers with 250 or more employees must report their gender pay gaps annually. UK employers with 100+ staff in an EU member state remain in scope of the Directive for those employees.
While both directives cover fair and equal pay practices, the minimum wage legislation covers fair living wages and collective bargaining rights. The pay transparency law aims to promote compensation fairness, particularly in addressing gender-based pay gaps.
How Workday helps you prepare for the EU Pay Transparency Directive.
Pay reporting can be complex, but covered employers must comply. Workday Pay Transparency Analyzer, powered by Kainos, is an AI-powered pay equity solution built securely into Workday. It helps organisations consolidate and categorise pay data, analyse and explain pay gaps, and navigate the complex global landscape of pay transparency—so reporting and audit preparation are grounded in a single, trusted source of workforce data.
*Please note that the information provided here is for informational purposes only and is not intended as legal advice. Organisations should always consult with their own legal counsel regarding any compliance-related matters and determine for themselves if the information provided here meets their business and compliance needs.