Key facts
- The EU's Pay Transparency Directive aims to close the 11.1% gender pay gap.
- Job postings and interviews must now include pay ranges.
- Workers can request average pay data for colleagues doing the same job, broken down by gender.
- Employers are prohibited from asking candidates about their salary history.
- Most EU member states missed the June 7 deadline for transposing the directive into national law.
- Companies with 150+ employees must report annually on the gender pay gap.
- Companies with an unjustified gender pay gap over 5% may face examination.
The European Union's new Pay Transparency Directive aims to address the persistent gender pay gap, which currently stands at an average of 11.1% per hour for women across the EU. The directive, proposed in 2023 as part of the Gender Equality Strategy 2020-2025, seeks to dismantle systemic transparency barriers that have historically made pay discrimination invisible.
Key provisions of the directive include mandating that job postings and interviews now disclose pay ranges, and granting workers the right to request average pay data for colleagues performing the same job, broken down by gender. Employers are also explicitly prohibited from inquiring about a candidate's salary history during the hiring process. This shift aims to empower individuals, particularly women, to identify and challenge unjustified salary disparities.
Despite the directive's adoption, implementation has been slow. Member states were required to transpose the directive into national law by June 7, but only a few, including Italy, Slovakia, Malta, and Lithuania, met this deadline. The delay in implementation by most member states means the full impact of the directive is yet to be realized across the bloc.
MEP Gabriele Bischoff highlighted how the directive lifts the "veil" around pay, preventing the perpetuation of lower salaries from job to job. The burden of proof is also shifted, requiring employers to justify pay gaps rather than employees proving discrimination. This is particularly relevant in female-dominated sectors where salaries are often systemically undervalued, and for mothers returning to the workforce who may face stalled salary progression.
For employers, the directive introduces new obligations, including ensuring gender-neutral job titles and recruitment processes. Companies with 150 or more employees must submit annual reports on their gender pay gap to national authorities. If an unjustified gap exceeding 5% is identified, the company may face examination. The first formal reports are due by June 7, 2027, based on 2026 salary data. The European Commission is providing tools to assist employers with compliance, including guidance on gender-neutral job evaluation.