EU Pay Transparency Directive 2026 🇪🇺
The EU has adopted new rules to combat pay discrimination and help reduce the gender pay gap. The Pay Transparency Directive comes into effect in June 2026. Read more here.
1. Employees and applicants have the right to information.
Employees and applicants have the right to information:
Employers are obliged to provide information about salary levels in connection with job postings or job interviews
Employees have the right to receive information about the average salary for the same work or work of the same value
Employers are obliged to annually inform employees of their right to receive salary information
2. Employers must disclose pay differences.
Companies with over 150 employees must report and publish the following from June 2026 (companies with 150-249 must report every 3 years and +250 must report every year):
The average salary difference between genders
The average salary difference between genders in complementary and variable components
The median salary difference between genders
The median salary difference between genders in complementary and variable components
The proportion of female and male employees receiving complementary or variable components
The proportion of female and male employees in each salary quartile
The salary difference between genders per category of employees, divided by regular salary and complementary or variable components
3. Consequences of non-compliance with the directive.
The burden of proof shifts to the employer when they fail to meet obligations regarding pay transparency set out in the directive, e.g., by refusing to provide information requested by an employee.
Employees who have been subjected to pay discrimination based on gender are entitled to full payment of owed compensation and associated bonuses for the entire period of employment.
The employer is obligated to conduct a joint pay assessment with employee representatives in the case of an unexplained pay gap of more than 5%.
4. Equal pay for the same or work of equal value.
To define equal work or work of equal value, the pay transparency directive requires that one has considered:
The company's job architecture: Jobs must be evaluated and placed in a job architecture that allows for comparison of which positions have equal value.
The company's pay policy: It must be clear how the company determines salaries. The criteria for salary setting, salary adjustments, and promotions must be based on objective and gender-neutral factors.
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