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Europe’s Pay Transparency Directive: Time to Prepare for the Unknown

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In recent months, we’ve held numerous client sessions on the EU Pay Transparency Directive, set to take effect by June 2026. A recurring question is how—or if—businesses can prepare when most Member States haven’t even released draft laws to implement it. Our answer? Don’t wait. The Directive offers enough clarity to start now, even without every detail nailed down.

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Contents

What We Know So Far

The Directive mandates that Member States ensure “employers have pay structures guaranteeing equal pay for equal work or work of equal value.” These structures must stem from job evaluation schemes assessing skills, effort, responsibility, and working conditions—core criteria unlikely to change. Some countries might tweak or expand these, but the foundation is set.

Building compliant pay structures and analyzing gaps (especially those over 5%) isn’t a quick fix—it could take months. With the clock ticking, starting early is critical. The Directive also calls for “analytical tools or methodologies” to aid this process, but don’t expect robust guidance. In today’s deregulation-friendly climate—championed by European Commission President Ursula von der Leyen—most states will likely stick to the Directive’s basics. Spain, with its public job evaluation tool, may keep its edge, while others lag.

Early Movers: What Draft Laws Reveal

Only a handful of Member States have shared their plans. Here’s what’s emerging:

Sweden

Sweden’s existing laws already align closely with the Directive, requiring annual pay reviews for equal work. Draft amendments add:

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  • Job applicants get initial salary info or ranges (not required in postings) and details on relevant collective agreements—beyond the Directive’s scope.
  • No asking about prior salary history, per the Directive.
  • Employees gain insight into wage “standards and practices” and their own pay versus gender averages for similar roles.
  • Firms with 100+ employees must report overall and category-specific gender pay gaps to the Equality Ombudsman, explaining gaps of 5%+.
  • Pay reviews must compare progression for employees on parental leave versus those who aren’t—a step beyond the Directive’s joint assessment requirement.
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Ireland

Ireland’s draft is modest, tackling only parts of the Directive:

  • Job ads must include salary levels or ranges—stricter than the Directive’s flexible timing.
  • No queries on past pay, as required.

Details on pay range specificity remain unclear.

Poland

Poland’s draft, pushed by MPs in December 2024 and narrowly passed in February, is a partial effort:

  • Pay transparency is absolute—salaries can’t be confidential, and employees can request individual and average pay data.
  • Job ads must list min/max salaries, with no flexibility on timing.
  • Employers must share objective, gender-neutral pay criteria (firms under 50 employees might be exempt—by whom, TBD).
  • Penalties hit for nondisclosure or paying below advertised rates, raising questions about flexibility (e.g., part-time adjustments).

It skips job evaluation and gap reporting, leaving those to a stalled government bill. The result? More confusion than clarity.

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Germany

Interim Minister Lisa Paus hinted at prioritizing flexibility in worker categories and strengthening the existing Right to Information—no rigid pay evaluation systems. But with the Green Party exiting the government, the new administration’s stance is uncertain. Stay tuned.

Why Act Now?

These early drafts vary, but none derail the Directive’s core: fair job evaluations and gap analysis. Waiting risks a scramble as June 2026 nears. Start assessing your pay structures against the Directive’s criteria—skills, effort, responsibility, and conditions. Identify gaps now, and you’ll have time to fix them. The tools may be basic, but the task isn’t. The time to move is today.

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