EU Pay Transparency Directive: What Employers Need to Know

EU Pay Transparency Directive: What polish Employers Need to Know  

In brief

The EU Pay Transparency Directive is now in force, with 7 June 2026 as the deadline for member states to adopt it into national law. While not all requirements apply yet, implementation is underway across countries, so now is a good time for organisations to prepare.

The directive aims to reduce gender pay gaps and support equal pay for equal work. It introduces new requirements for employers, including sharing salary ranges upfront, not asking about pay history, and being more transparent about pay and progression.

In this article, we explain what the directive means in practice and how you can start preparing your hiring processes.

For further support, explore our Salary Transparency Hub for expert insights and resources.

What You’ll Find in This Guide:

1. What Is the EU Pay Transparency Directive?
2. What Is Pay Transparency and Why Now?
3. What Are the Key Details of the New EU Pay Transparency Directive?
4. What Are the Benefits and Opportunities of Salary Transparency for Employers?
5. What Does the New Directive Mean for Employers: Compliance Requirements?
6. What Are the Challenges and Risks of the Directive for Employers?
7. What Can Employers Do to Prepare?
8. What Should Employers Do Now to Get Ready for Pay Transparency? 

In practical terms, it requires employers to:

• Share salary ranges during hiring
• Give employees access to pay information
• Report on gender pay gaps, depending on company size

The directive is part of a broader effort to reduce the gender pay gap and bring more consistency to how pay is set and communicated.  

What Is Pay Transparency, and Why Now?  

Pay transparency means being clear about how pay is set and communicated within your organisation.

In practice, this includes:

• Sharing salary ranges with candidates during hiring
• Explaining how salaries are decided, including factors like skills, experience and performance
• Giving employees visibility into pay levels and progression

Transparency supports fairer pay across the workforce.

This matters because pay gaps still exist across the EU. The gender pay gap is around 13%, with women earning less than men on average for comparable work. Progress has been slow over the past decade, which is why there is now more focus on transparency and accountability.

The directive builds on this by setting clearer expectations for how organisations handle pay.

Expectations around salary transparency are changing, and candidates increasingly expect clear pay information when applying for roles.

 “Equal work deserves equal pay. And for equal pay, you need transparency. Women must know whether their employers treat them fairly. And when this is not the case, they must have the power to fight back and get what they deserve.”  

 - Ursula von der Leyen, President of the European Commission.  

What Are the Key Details of the New EU Pay Transparency Directive?

Almost every business in the EU will need to follow the EU Pay Transparency Directive. It applies to both private and public organisations based in or operating in the EU.

So, what does this mean in practice? Employers will need to be more transparent about pay. This includes sharing salary information with candidates before hiring, and ensuring employees, including those leaving the organisation, can access information about their pay.

There are several key requirements to prepare for:

• Salary transparency: Include clear salary ranges in job adverts and do not ask candidates about their salary history
• Employee rights: Employees can request and receive pay data, including average pay by gender and role
• Pay gap reporting: Companies with over 250 employees must report annually, while those with 150 to 249 employees report every three years. Gender pay gap reporting for organisations with 150 or more employees begins on 7 June 2027. Reports must highlight gaps and outline actions where differences exceed 5%
• Pay criteria: Define clear, gender-neutral criteria for promotions and salary progression
• Corrective action: Where gaps exist, carry out joint pay assessments and take steps to address them

Non-compliance can lead to penalties, so it is important to take steps now to prepare.

What Are the Benefits and Opportunities of Salary Transparency for Employers?

While it does increase responsibilities for employers, the EU Pay Transparency Directive also brings clear benefits:

Builds trust and engagement 
Sharing salary information and gender pay data helps build trust. It can improve engagement and makes it easier to track progress over time.

Improves hiring efficiency 
Clear salary ranges attract candidates who match expectations. This reduces misaligned applications and helps shorten the hiring process.

Supports employee satisfaction 
Clear, consistent criteria for pay and progression helps employees feel fairly treated and valued.

Strengthens diversity and inclusion 
Transparency helps reduce bias in pay decisions and supports more consistent, fair outcomes across the workforce.

Makes salary discussions easier 
Clear expectations make conversations around pay more straightforward for both hiring managers and candidates.

Increases accountability 
Transparent processes make it easier to identify pay gaps and take action where needed.

What Does the New Directive Mean for Employers: Compliance Requirements?

If your organisation is in scope, there are several steps you will need to take. While this may feel complex, breaking it down into clear actions makes it easier to manage.

1. Share salary information during hiring

Employers will need to be open about pay during recruitment. This includes adding salary ranges to job adverts or sharing them before interviews.

For example: ‘The salary for this role ranges between €45,000 and €50,000 depending on experience.’

To do this well, many organisations will need to define clearer salary ranges and build a structured pay policy.

You will also need to use gender-neutral job titles and descriptions.

2. Respond to employee requests for pay information

Employees have the right to request information about their pay. This includes:

Their individual salary level

Average pay for comparable roles, by gender

Employers must respond within 60 days and provide this information in writing.

Employees should also be informed of this right on a regular basis.

3. Avoid asking about salary history

Employers should not ask candidates about their previous pay during the hiring process.

This helps ensure fair and transparent salary decisions based on the role, not past earnings.

4. Define clear criteria for pay and progression

Employers need to explain how pay decisions are made. This includes:

• Salary increases
• Promotions
• Career progression

Criteria should be clear, consistent and based on factors such as skills, experience and level of responsibility.

Differences in pay are allowed where they are based on objective factors such as performance.

5. Prepare for gender pay gap reporting

7 June 2027 will be an important milestone for organizations employing at least 150 employees. On that date, the deadline for submitting the first gender pay gap reports under the EU Pay Transparency Directive will apply. The frequency of reporting will depend on the size of the employer.

As the Directive is being implemented into Polish law, organizations are preparing to meet the new requirements related to pay transparency and gender pay gap reporting. These obligations form part of a broader trend towards greater pay transparency across the European Union.

Reports should:

• Highlight any pay gaps
• Explain differences
• Track progress over time

If a gap of more than 5% cannot be justified, employers will need to carry out a joint pay assessment and take action.  

6. Take action to address pay gaps

Where gaps exist, employers are expected to address them. This may include:

• Running pay audits
• Reviewing salary structures
• Putting action plans in place

The responsibility sits with the employer to demonstrate that pay is fair.

If pay discrimination is proven, employees may be entitled to compensation, including back pay.

What Are the Challenges and Risks of the Directive for Employers?

As with any major change, there are also risks and challenges to consider:

Internal resistance:

Challenge: Not everyone will be comfortable with more transparency around pay. Differences in salaries for similar roles may lead to questions or tension.

Solution: Explain how pay decisions are made and give employees a way to share feedback. Clear communication helps build trust.

Increased pressure to retain talent:

Challenge: As salary information becomes more visible, competitors may attract employees with higher offers.

Solution: Focus on retention through development opportunities, clear career paths and flexible ways of working.

Adjusting existing salaries:

Challenge: Reviewing pay structures may highlight differences between new hires and existing employees, which can affect morale.

Solution: Carry out regular reviews, communicate clearly and make changes in phases where needed.

Managing employee expectations:

Challenge: Employees may ask more questions about pay or challenge decisions, which can take time to manage.

Solution: Set clear pay policies and train managers to handle conversations in a consistent, constructive way.

Data privacy and confidentiality:

Challenge: Sharing pay data needs to be handled carefully to avoid breaching privacy rules.

Solution: Use anonymised, aggregated data and set clear internal guidelines.

What Can Employers Do to Prepare?

There are a range of measures you can undertake to prepare for the EU Pay Transparency Directive. These include:  

• Review current pay structures 
  Start by assessing your pay policies to identify any gender pay gaps. Use this to shape clear action plans. Introducing consistent, skills-based criteria for promotions and progression can help reduce bias and support fairer outcomes.
• Analyse employee groups 
  Reviewing different employee groups can highlight where gaps exist. For example, comparing average pay for men and women in similar roles can help identify areas that need attention.
• Include pay equity in risk planning 
  Bringing gender pay equity into your broader risk planning helps make it part of day-to-day business decisions. Regular reviews or audits can help identify issues early.
• Use market benchmarks 
  The annual Michael Page Salary Guide gives a clear view of salary ranges by role and experience. It helps you compare your salaries with the market, so you can keep your pay fair and transparent.

What Should Employers Do Now to Get Ready for Pay Transparency?

Staying up to date with salary data, skills and job market trends can help you prepare for the EU Pay Transparency Directive.

For businesses preparing early, understanding these changes matters. We’ve created a set of resources to help, including a new eBook on how the directive is shaping recruitment. They offer clear, practical guidance to help you navigate what’s ahead.