Divyanshu G 
(C): X
The EU Pay Transparency Directive (EU) 2023/970 is set to revolutionize workplace equity, but its staggered timeline has left many employers confused. Your reporting responsibilities are now directly dependent on your number of employees in case you are in the EU.
Understanding the New Pay Transparency Thresholds
All the EU member states should have this directive converted into the national law by June 7, 2026. While pay transparency thresholds vary, the rules for salary disclosure in job ads apply to all employers immediately upon transposition.
Reporting Obligations for 250+ Employees
Companies employing an employee base of 250 and above are faced with the toughest demand. You are required to report about your gender pay gap on an annual basis.
- First Deadline: June 7, 2027 (based on 2026 data).
- Requirement: Detail report on gender pay gap, and complementary/variable components.
Reporting for 100-249 Employees
For smaller enterprises, the EU Pay Transparency Directive offers a phased approach:
- 150 or more, 249 or less Employees: Report every three years, beginning June 7, 2027.
- Employees 100-149: Annual report after every three years (since June 7, 2031).
Note: If your gender pay gap reporting reveals a discrepancy of 5% or more that cannot be justified by objective, gender-neutral criteria, you must conduct a Joint Pay Assessment.
Universal Rights for All Workers
All the employees will have the Right to Information, no matter how many employees are present. They are allowed to demand information on the average remuneration rates to workers performing the same work or other equivalent work, which are disaggregated according to gender.
FAQs
1. Does the EU Pay Transparency Directive apply to companies with fewer than 100 employees?
Yes, but they are exempt from the mandatory gender pay gap reporting requirement unless their specific member state decides otherwise. Nevertheless, they still have to follow the regulations when it comes to the adverts on salaries and the prohibition of the questions on salary history.
2. When must companies start collecting data for the first report?
The collection of data among companies with 150 employees and above will have to begin by 2026 to fulfill the first reporting deadline of June 7, 2027.
3. What happens if I have an unjustified pay gap of 5%?
In case the difference exceeds 5 percent and cannot be justified by objective gender-neutral factors, then you must conduct a Joint Pay Assessment together with worker representatives.
4. Can I still ask candidates about their current salary?
No. The directive clearly prohibits employers to inquire the candidates of their pay history in the recruitment process.
