Quick Hits
- The European Commission issued guidance in August 2026 that clarifies some aspects of the EU Pay Transparency Directive, but leaves many questions unanswered.
- The guidance confirms that the directive applies to public- and private-sector employers, and that pay information does not have to be provided in job advertisements, but must be provided before a job interview.
- The guidance outlines the four key characteristics to determine equal value, and notes that others may be permissible but does not provide examples.
What Does the Guidance Confirm?
The guidance, issued in the form of frequently asked questions (FAQs), confirms that the directive’s scope applies broadly. It states that the directive applies to employers in both public and private sectors including those covered by collective agreements. It also confirms that the directive does not apply to genuinely self-employed workers and that pay information does not have to be provided in job advertisements, rather it must be provided before a job interview. This is of course, subject to implementation of the directive at a national level which may mandate that the information must be in a job posting as has been seen from some member states such as Italy.
The FAQs also address compatibility with the General Data Protection Regulation (GDPR). For example, the directive requires disclosure of average pay levels, but not of an individual’s pay data.
The guidance further states that equal pay compliance represents a “public interest” under GDPR Article 6(3) and member states have the option to put in place additional safeguards in instances where small comparator groups of pay data may reveal an individual’s pay. Article 12(3) of the directive enables member states to only disclose pay information to workers’ representatives, labour inspectorates, or equality bodies who can then inform employees whether pay discrimination has taken place. This is an area that is expected to develop as there are still concerns and criticisms from member states around a perceived incompatibility between the directive and GDPR.
There is clarification around what should be included as “pay.” Payments and benefits in cash or in kind that are available to all workers without any exception or eligibility criteria—such as laptops and/or mobile phones—do not need to be included. Equally, payments or benefits that are optional without any eligibility criteria would also not be included, such as whether a worker can choose to take a gym membership.
Areas That Remain Ambiguous
The FAQs leave areas of implementation of the directive unaddressed or ambiguous. For example, it outlines the four key characteristics to determine equal value—skills, effort, responsibility, and working conditions—and notes that additional factors may be permissible if relevant and gender-neutral yet does not expand on what is acceptable. Furthermore, the guidance does not address the practical implications for employers whose employees are not represented by trade unions.
A reference is made to market conditions as a potential factor that may affect or explain pay differences. The FAQs note that as a factor it should be “treated with caution” as it is less likely to be linked to the actual value of the job itself but does not elaborate further on this point. Although the United Kingdom is outside the scope of the directive, it will be interesting to see if the recent judgment in the case of Next Retail v Thandi & Others is mirrored elsewhere across the EU.
Information and updates on the progress of the directive’s implementation across the European Union can be found using the Ogletree Deakins’ EU Pay Transparency Directive Member State Implementation Tracker.
Ogletree Deakins’ London office, Cross-Border Practice Group, 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.
Mai Barry, a paralegal in Ogletree Deakins’ London office, contributed to this article.
Follow and Subscribe
LinkedIn | Instagram | Webinars | Podcasts
