Equality and transparency of pay in the European Union

 

The EU Member States are obliged to implement the Directive by 7 June 2026, whereas they may either introduce or keep provisions that are more favourable to workers than those laid down in the Directive.

 

 

As indicated in the preamble to the Directive, the gender pay gap, that is the difference in average pay between male and female workers of a given employer, expressed as a percentage of average pay of male workers, stood at 13% in 2020 in the European Union. The economic and social effects of the COVID-19 pandemic reinforced this inequality. 

 

The goal of the Directive is to:

 

 

According to the new laws, all workers will have the right to be informed in writing about their individual pay level, the average level of pay for equal work or work of equal value, and about the criteria used to determine the pay level. Additionally, the Directive requires employers to submit reports on the pay gap in their organisation to workers, their representatives or competent bodies, and to assess the pay jointly with the workers' representatives whenever the pay gap is at least 5%. 

 

The EU Directive also regulates the pay transparency prior to employment. Accordingly, job applicants will be able to receive information, determined on the basis of objective criteria, about the initial pay, or its range, applicable in a given position, yet before the job interview. At the same time, the employer will not have the right to ask job applicants about their current or previous pay. 

 

After the Directive is transposed into national law, workers who have sustained damage as a result of a breach of the principle of equal pay, will have the right to claim full compensation or reparation, as determined by the Member State, for that damage.  Moreover, employers infringing the rights and obligations relating to the principle of equal pay will be liable to a fine.

 

If you want to know how the Pay Equality and Transparency Directive may affect your business, you are welcome to contact us. We provide labour law advice to entities operating in any sector and in any legal form.