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Pay Transparency Directive
Equal pay: new rules on pay transparency in the EU
In recent years, the European Union has been consistently striving to improve the conditions of employees in the labour market. One of the new directives that will have an impact on companies and their employees as well as job applicants is the Directive on gender pay transparency. From mid-2027, the Directive will require companies to report gender-related data on pay equality and will also require them to be able to transparently inform their employees and candidates about the salary level for a given position. Overall, the Directive brings with it a number of issues and challenges that we need to start preparing for as soon as possible.
Everything you need to know about pay transparency directive
What obligations does the Directive entail?
The Directive imposes four basic obligations on companies:
Who will be affected by the Directive and from when will reporting be mandatory?
The new rules will affect all employers regardless of their size. Member States are required to implement the Directive by June 2026.
Under the Directive, gender pay gap reporting will only apply to companies with 100 or more employees (however, the Czech legislator may also impose obligations on smaller companies). The frequency of reporting and the deadline for submitting the first report will vary depending on the size of the company. Companies with more than 150 employees will be obliged to submit data on the gender pay gap in 2027, but data for 2026 will already be reported.
What will all be affected by the Directive?
The Directive will affect a number of activities and processes that take place in HR, including how these processes are set up at their core. Below is a brief list of impacts to consider.
How can we help you?
Companies will have to comply with the obligations under the Directive no sooner than in 2026. However, given the impact that its requirements will have on various HR processes, we recommend that you start preparing now.
We offer clients both tailored support and several other versatile products to help you prepare for the new obligations.
As part of this comprehensive project, we will help you with:
- Review and updates of the job architecture and its catalogue;
- Evaluation and grading according to the Deloitte methodology, which will then be retained for future use;
- Benchmarking and setting up remuneration bands for individual grades/job families;
- Identifying outliers and setting up a pay alignment strategy;
- Designing a methodology to justify any pay differentials (number of years on the job, education, overtime, performance, etc.) for EU Pay Transparency reporting purposes;
- Setting up governance for the EU Pay Transparency Directive for all HR processes;
- Taking into account the obligation of transparent communication within the recruitment process and within the company and towards employees.
Is the gender pay gap in your company below 5%?
Let your employees and applicants know and be a certified fair employer. Get in touch with us and we will help you achieve the European Fair Pay Innovation Lab certification.
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