EU Pay Transparency Directive Deadline Fast Approaching

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Quick Hits

• Employers across the EU are preparing for the June 2026 deadline to comply with the EU Pay Transparency Directive, which mandates new pay equity practices and transparency obligations.
• The directive enhances employee rights by allowing employees to request detailed pay information, and employers must provide this within a set timeframe.
• The directive introduces a harmonised gender pay gap reporting framework, requiring detailed reports based on company size and mandating joint pay assessments for significant pay gaps, with enforcement measures including penalties for noncompliance.

New Recruitment Requirements

The directive introduces a new level of openness around pay. Employers will be required to disclose the starting salary or salary range for a role in the job advertisement or at the latest before the first interview. Employers will no longer be allowed to ask candidates about their previous pay history. These measures are designed to prevent historical pay inequality, ensuring that salary decisions are based on the value of the role rather than an individual’s past earnings. These changes will require employers across the EU to review their recruitment processes and stay up to date with the new requirements.

Enhanced Employee Rights to Pay Information

The directive significantly expands employees’ rights to access pay‑related information. Employees will be entitled to request details of their own pay level and the average pay levels of colleagues performing the same work or work of equal value, broken down by gender. Employers must provide this information within a set timeframe, typically within two months, although this timeframe may vary at member state level.

This enhanced transparency means employers must ensure their pay structures are clear and consistently recorded. The European Institute for Gender Equality is set to introduce a step-by-step job evaluation toolkit to aid employers with this process, although this is currently at a draft stage.

Expanded Gender Pay Gap Reporting Across the EU

While several EU member states already have gender pay gap reporting requirements, the directive introduces a harmonised and more detailed reporting framework. Under the directive, employers are required to report the gender pay gap according to headcount per legal entity in each member state:

• 250 or more employees: Annual reporting from 7 June 2027
• 150 to 249 employees: First report by 7 June 2027, then every three years
• One hundred to 149 employees: First report by 7 June 2031, then every three years

A key new requirement is the obligation to conduct a joint pay assessment where a gender pay gap of more than five percent exists and cannot be justified by objective, gender‑neutral factors and it has not been remedied within six months. This assessment must be carried out with employee representatives and must identify the causes of the gap and the measures needed to address it.

Stronger Enforcement

Under the directive, the burden of proof will sit with the employer, meaning organisations must be able to demonstrate that their pay practices are fair and transparent. Employees who experience pay discrimination will have access to compensation, and member states will enforce penalties for noncompliance.

Implementation Progress Across the EU

Member states are currently at different stages of preparing the legislation required to transpose the directive into national law. Some countries have already launched consultations or published draft legislation, while others are expected to do so in the coming months, while some member states, such as the Netherlands, have expressed concern over delays in meeting this deadline. For employers, implementing measures can be a timely process and waiting for final legislation at the national level before taking action may increase the risk of non-compliance.

Information and updates on the progress of the directive’s implementation across the European Union can be found using Ogletree Deakins’ Member State Implementation Tracker.

Further information can also be found by listening to our podcast, “Understanding the EU Pay Transparency Directive: What Employers Need to Know.”

Ogletree Deakins’ London office, Pay Equity Practice Group, and Workforce Analytics and Compliance Practice Group will continue to monitor developments and will provide updates on the Cross-Border, Pay Equity, and Workforce Analytics and Compliance blogs as additional information becomes available.

Daniella McGuigan is a partner in the London office of Ogletree Deakins and co-chair of the firm’s Pay Equity Practice Group.

Lorraine Matthews, a practice assistant in the London office of Ogletree Deakins, contributed to this article.

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