EU Pay Transparency Directive Checker
Check if the EU Pay Transparency Directive applies to your organization. Answer a few questions about your company location, employee count, hiring practices, and current salary transparency level to find out your obligations regarding salary range disclosure in job postings, pay gap reporting, and employee information rights. The directive must be transposed into national law by EU member states by June 2026.
What Is the EU Pay Transparency Directive?
The EU Pay Transparency Directive (Directive 2023/970) is a landmark piece of European legislation designed to strengthen the principle of equal pay for equal work or work of equal value between men and women. Adopted in May 2023, the directive requires EU member states to transpose its provisions into national law by 7 June 2026. Once implemented, it will fundamentally change how employers across the European Union handle pay information, requiring greater openness about salary structures, mandatory pay gap reporting for larger organizations, and new rights for employees to access pay-related information.
The directive addresses the persistent gender pay gap across the EU, which stood at approximately 12.7% in 2022. Despite existing equal pay legislation, the gap has narrowed only slowly over the past decades. The EU identified a lack of pay transparency as one of the key obstacles to closing the gap, as employees often have no way to determine whether they are being paid fairly compared to colleagues doing the same or equivalent work. By making pay structures more visible and giving employees the right to request pay information, the directive aims to empower workers and incentivise employers to proactively address any unjustified pay differences.
Key Requirements of the Directive
The directive introduces several important requirements that affect different aspects of the employment relationship. For recruitment, employers must provide salary range information to job applicants before or during the interview process. This can be included in the job advertisement itself or communicated before the interview. Employers are also prohibited from asking candidates about their current or previous salary. These recruitment provisions apply to all employers who post job vacancies, regardless of their size.
For existing employees, the directive grants the right to request information about their individual pay level and the average pay levels, broken down by sex, for categories of workers doing the same work or work of equal value. Employers must respond to these requests within a reasonable time and must not prevent employees from disclosing their pay information to others. Organizations with 100 or more employees face additional pay gap reporting obligations, requiring them to report on the gender pay gap within their workforce at regular intervals. If the reported pay gap exceeds 5% in any category and cannot be justified by objective, gender-neutral criteria, the employer must conduct a joint pay assessment with worker representatives.
Impact on Employers of Different Sizes
The directive applies to all employers in the EU, but the reporting obligations scale with company size. All employers, regardless of size, must comply with the recruitment transparency provisions (providing salary ranges in job ads and not asking about salary history) and the employee information request provisions. However, the mandatory pay gap reporting obligations apply only to organizations with 100 or more employees. For companies with 100-149 employees, reporting is required every three years. For companies with 150-249 employees, reporting is also every three years initially but may become annual. For companies with 250 or more employees, reporting is required annually. These reports must include the overall gender pay gap, the gender pay gap in complementary or variable components, the median gender pay gap, the proportion of female and male workers in each pay quartile, and the gender pay gap by category of workers.
Non-EU companies that employ workers in the EU or sell products and services into the EU market should also assess their obligations carefully. While the directive primarily targets EU-based employers, companies with subsidiaries or employees in EU member states will need to comply with the national implementing legislation in each relevant country. The specific transposition of the directive may vary between member states, as countries have some flexibility in how they implement the provisions, particularly regarding enforcement mechanisms and penalties for non-compliance.