EU Pay Transparency
Directive 2026
The EU has approved the pay transparency directive to combat gender pay discrimination and close the pay gap. All EU member states must implement these requirements by June 2026.
Close pay gaps >5% within 6 months of discovery
If your analysis shows a 5% or higher pay gap between men and women in any job category, you must eliminate it within 6 months or face mandatory remediation (see article 10).
- Measure pay gaps by worker category
- If gaps > 5% and cannot be justified using objective gender neutral controls, you have 6 months to fix them
- If unfixed after 6 months, you must conduct a joint pay assessment with employee representatives
Submit gender pay gap metrics to national monitoring bodies
Organizations with 100+ employees must calculate and submit comprehensive pay gap metrics to national monitoring bodies (see article 9).
The report must contain:
- Average and median gender pay gaps for base pay
- Average and median gender pay gaps for bonuses and variable compensation
- Proportion of men vs women receiving variable pay
- Gender distribution across four pay levels
- Pay gaps by job category, broken down by basic and variable pay
Provide employees with pay information on request
Employees can demand detailed pay information on their individual pay relative to their group. The request must be served within 2 months of asking (see Article 7).
The request must contain:
- The employees individual pay
- Average pay levels by gender for their
The organization is obliged to notify employees annually of their right to request pay information
Disclose pay ranges when posting jobs
All job applicants must receive pay information before employment decisions
The employer must:
- Include salary ranges in job postings or share during interviews
- Provide relevant collective agreement information, where relevant
- Use gender-neutral job titles and recruitment processes
In addition, an employer is prohibited from asking candidates about current or previous salaries
Establish an unbiased job evaluation system
Create fair systems to compare different jobs and determine equal value (see article 4.4)
- All jobs must be graded based on objective criteria including skills, effort, responsibility, working conditions.
- Use only other job factors that are free from gender bias.
Penalties for non-compliance
Companies face unlimited compensation payments to employees, mandatory fines designed to cause real financial pain, and potential exclusion from government contracts (see articles 16, 18, 23) . Repeat violations carry enhanced penalties that can include court-ordered restructuring of your entire pay system.
