What Prohibitions Will Apply to Employers Under the Equal Pay Directive
The Equal Pay Directive (EU) 2023/970 has been in force since June 6, 2023, and the deadline for its transposition into the national laws of Member States is June 7, 2026. The directive aims to implement measures to ensure equal pay, primarily through greater transparency and accountability. Even if transposition measures are delayed, all employers should bring their internal policies into compliance with the new rules in a timely manner.
What the Directive Introduces:
• Transparency before hiring employees – employers will be required to specify the starting salary or salary range in job postings. It will be prohibited to request information about a candidate’s previous compensation;
• Right of access to information – employees will be able to request data on their individual pay levels and average pay levels, broken down by gender, for categories of workers performing work of equal value;
• Reporting obligation – employers will submit periodic reports on gender pay gaps to the competent authority;
• Internal rules – employers must have objective and gender-neutral criteria for determining pay levels and pay increases;
• Pay confidentiality – confidentiality clauses regarding pay in employment contracts must be removed.
When Do the Obligations Take Effect?
Following the transposition of the Directive, the obligations will take effect in phases:
• As of June 7, 2026 – pay ranges in job postings; prohibition on requesting information about prior pay; internal equal pay policies; obligation to provide information on the pay of employees in comparable positions.
• From June 7, 2027 – mandatory reports on pay gaps. Employers with more than 250 employees must submit reports annually; those with between 150 and 249 employees must do so every three years.
• Effective June 7, 2031 – reporting obligations are extended to employers with between 100 and 149 employees (every three years). For employers with fewer than 100 employees, submitting a report is voluntary unless the legislature determines otherwise during transposition.
What Are the Risks of Non-Compliance with the New Requirements and Failure to Adapt the Employer’s Internal Documents?
• Financial penalties;
• Legal claims from workers and employees;
• Lack of transparency and refusal to provide information;
• Reputational damage.
How Should You Prepare?
The best approach is to promptly adapt the company’s internal documents – pay rules, employment contracts, and data protection policies; introduce objective criteria for compensation; and prepare for transparency and public disclosure of work processes.
If you have questions regarding the obligations under the Equal Pay Directive and the resulting changes in labor legislation, you can contact our experts.
