About the Directive
The EU Pay Transparency Directive introduces a new legal framework aimed at ensuring equal pay for equal work or work of equal value between women and men.
The Directive:
- brings a fundamental shift from confidentiality to transparency by requiring employers to:
- to disclose pay information;
- report gender pay gaps; and
- take corrective actions where unjustified differences exist.
- strengthens employees’ rights to information and compensation;
- introduces remedies and penalties to prevent and address pay discrimination;
- applies to all employers (both public and private) and covers all categories of employees in the EU, including part-time, fixed-term, and those employed through temporary agencies.
Reporting Obligations
Employers with at least 100 employees, the new framework introduces mandatory reporting obligations regarding gender pay gaps.
- Key reporting requirements include:
- Gender pay gap (mean and median);
- Pay gap in variable and supplementary components;
- Share of women and men receiving variable pay;
- Gender distribution across pay quartiles;
- Pay gaps by category of workers (base salary vs variable components).
- The reporting framework is phased depending on company size as follows:
| Company Size | First Reporting Deadline | Frequency |
| (no. of employees) | ||
| 250+ | June 7th , 2027 | Every Year |
| 150 – 249 | June 7th , 2027 | Every 3 Years |
| 100 – 149 | June 7th , 2031 | Every 3 Years |
| < 100 | Voluntarily | Voluntarily |
What all Employers need to do:
To ensure compliance, organizations will need to implement a structured and transparent approach to remuneration.
Key actions include:
- classifying employees into categories of workers performing equal work or work of equal value, based on objective and gender-neutral criteria;
- implementing pay structures that ensure equal remuneration for equal work or work of equal value;
- defining principles and guidelines for remuneration and compensation (i.e. fixed, variable and any other components) for the whole organization;
- implementing employee performance evaluation procedures (incl. associated criteria, objectives, KPIs) to ensure objectivity and transparency;
- review and amendment of HR policies and procedures (including within the recruitment process);
- ensuring clarity on roles, accountabilities, responsibilities and job descriptions.
Wondering whether your organization is ready?
Understanding your current level of readiness is the first step – access the following link: https://forms.office.com/e/eDv9tdhnct?origin=lprLink and complete our Pay Transparency Readiness Assessment to identify gaps and next steps.
You will receive a tailored evaluation of your organization’s compliance readiness, together with some practical recommendations.
