The EU Pay Transparency Directive (Directive (EU) 2023/970) was due to become national law across the EU by 7 June 2026. Most member states missed that deadline, and some HR teams have taken that as permission to wait. That’s a risky reading. The obligations themselves are fixed, the first reports for large employers are due in June 2027, and nearly all the work falls on HR processes and HR data. This guide explains what the Directive requires in practical terms, and what you need to change in your processes and systems to be ready.
Where things stand
According to transposition trackers kept by several employment law firms, only a handful of member states, Slovakia among them, had fully transposed the Directive by the June 2026 deadline. Others had passed partial measures, many had published draft bills, and some, including Germany and Spain, were still at an early stage. Sweden has said publicly that it wants parts of the Directive renegotiated.
This will change month by month, so check the current position in every country where you employ people. But the delay doesn’t change what you will need to do, for three reasons:
- The core obligations are set in the Directive itself. National laws can go further, but not below it.
- Your 2026 pay data is already being created. The first reports for employers with 250 or more workers are due by 7 June 2027, based on the previous calendar year.
- The European Commission can open infringement proceedings against late member states, and national courts are expected to interpret existing equal-pay law in line with the Directive.
What the Directive requires, area by area
“Pay” in the Directive is broad. It covers the ordinary basic wage or salary and any other payment, in cash or in kind, that a worker receives because of their employment: bonuses, overtime, allowances, company cars, share schemes and similar.
1. Recruitment
- Pay range up front. Candidates must receive the initial pay, or its range, for the role, based on objective and gender-neutral criteria. It can be in the job advert or provided before the interview, and must include any relevant collective agreement provisions.
- No pay history questions. You may not ask candidates what they earn now or earned in previous jobs.
- Neutral vacancies. Job titles, adverts and the recruitment process must be gender-neutral and non-discriminatory.
What changes in practice: an approved pay range must exist for every role before it’s advertised, salary history fields come out of application forms and recruiter scripts, and advert templates are reviewed for gendered wording.
2. Pay structures and progression
Employers must make easily available to their workers the criteria used to set pay, pay levels and pay progression. The criteria must be objective and gender-neutral. Member states may exempt employers with fewer than 50 workers from the progression part.
What changes in practice: you need a real job architecture, meaning job families, levels and grades with documented criteria. “We pay what the market demands” isn’t a criterion. Every worker should map to a defined role and level.
3. The right to information
- Workers can ask for their own pay level and the average pay levels, broken down by sex, for categories of workers doing the same work or work of equal value.
- You must answer within a reasonable period, and no later than two months from the request.
- You must inform all workers of this right every year.
- Contract terms that stop workers disclosing their own pay are not allowed.
What changes in practice: you need a defined request process (who receives requests, who calculates the answer, who approves it), a way to calculate category averages quickly, and a reminder in the annual HR calendar. Remove pay-secrecy clauses from contract templates.
4. Gender pay gap reporting
| Employer size (workers) | First report due | Frequency |
|---|---|---|
| 250 or more | 7 June 2027 | Every year |
| 150–249 | 7 June 2027 | Every three years |
| 100–149 | 7 June 2031 | Every three years |
| Fewer than 100 | Not required by the Directive (national law may require it) |
The report must include:
- the overall gender pay gap;
- the gender pay gap in complementary or variable components;
- the median gender pay gap;
- the median gender pay gap in complementary or variable components;
- the proportion of female and male workers receiving complementary or variable components;
- the proportion of female and male workers in each pay quartile;
- the gender pay gap by category of workers, broken down by basic pay and complementary or variable components.
The first six go to your national monitoring body (and may be published). The last one, the gap by category of workers, goes to all workers and their representatives, and to the labour inspectorate and equality body on request. The gaps are calculated on gross hourly pay, so part-time and full-time workers can be compared fairly.
5. Joint pay assessment
If your report shows a gender pay gap of 5% or more in any category of workers, you can’t justify it with objective, gender-neutral criteria, and you haven’t fixed it within six months of reporting, you must carry out a joint pay assessment with workers’ representatives. It covers analysing the causes, the measures to address them, and how their effectiveness will be checked.
6. Enforcement
- The burden of proof shifts to the employer. Once a worker presents facts suggesting pay discrimination, it’s up to you to prove there was none. If you haven’t met your transparency obligations, that is held against you.
- Full compensation. Workers can recover back pay, related bonuses and payments in kind, with interest. Member states may not set an upper limit in advance.
- Longer limitation periods. Workers have at least three years to bring a claim.
- Penalties must be “effective, proportionate and dissuasive”, and fines are set by each member state.
It’s mostly a data problem
The legal requirements are the easy part to understand. What slows HR teams down is that the data needed to meet them is spread across payroll, the HR system, spreadsheets and managers’ inboxes. To produce the report and answer information requests, every worker record needs at least:
| Data point | Why it’s needed | Common problem |
|---|---|---|
| Sex | All gap calculations | Missing or inconsistent across systems |
| Role, job family and level | “Same work or work of equal value” categories | Free-text job titles, one title per person |
| Contracted hours / FTE | Converting to gross hourly pay | Not updated after contract changes |
| Base pay | Basic pay gap | Held in payroll only |
| Each variable component | Variable pay gap and proportions | Bonuses paid ad hoc, not categorised |
| Benefits in kind | Part of “pay” | Company cars and allowances not tracked in HR |
| Country, entity, location | Reporting per employer and per member state | Group structures with mixed entities |
A 90-day readiness plan
Days 1–30: Take stock
- List every entity and country where you employ people, and check the local transposition status.
- Count workers per entity to find out which reporting timeline applies to you.
- Map where each data point in the table above lives today, and who owns it.
- Collect current contract templates, job advert templates and application forms.
Days 31–60: Build the structure
- Define job families, levels and the criteria for work of equal value (skills, effort, responsibility and working conditions are the factors the Directive names).
- Assign every worker to a category.
- Run a dry-run report on your 2025 data. It’s the fastest way to find data gaps, and to see any pay gaps over 5% before they become a legal obligation.
Days 61–90: Fix the processes
- Update job advert templates with pay ranges, and remove salary history questions.
- Remove pay-secrecy clauses from contract templates.
- Set up the information-request process with a two-month deadline, and a template for the answer.
- Schedule the annual notice to workers about their right to information.
- Brief managers and recruiters on what they may and may not say about pay.
What to look for in HR software
Spreadsheets can get a small company through its first report, but they struggle with information requests arriving throughout the year and with an audit trail. When you evaluate an HR management system, ask whether it can:
- store a structured job architecture (families, levels, grades) and link every worker to it;
- hold an approved pay range per role, and carry it through to job adverts;
- store every pay component, including variable pay and benefits in kind, or reliably import it from payroll;
- calculate gross hourly pay and the seven report indicators, per legal entity;
- produce category averages by sex on demand, for individual information requests;
- keep an audit trail of pay decisions and their justification;
- restrict access to pay data by role, in line with the GDPR.
Sources and further reading
- EUR-Lex: Directive (EU) 2023/970 (full text)
- Littler: Implementation status of the EU Pay Transparency Directive
- L&E Global: Transposition across the 27 member states
This article is general information, not legal advice. National implementing laws may add requirements or set different details, so confirm your obligations in each country with local employment counsel. Status as of September 2026.