EU Pay Transparency Directive – an update

The deadline passed earlier this month but the disparity it targets is still a long way from being righted.

The deadline for implementing the EU Pay Transparency Directive passed on 7 June. However, there remains significant disparity in progress made by each member state in putting the it into effect.

While the directive provides the requirements at a high level, delays have arisen as individual countries interpret and embed these into national legislation alongside existing legal frameworks.

What the directive requires

The aim of the directive is to foster a culture of transparency around pay and address gender pay inequality. However, the delays in implementation from most countries have led to uncertainty and confusion for employers - particularly those operating across multiple jurisdictions - while each country’s interpretation is finalised.

The key articles of the directive are:

Pay transparency pre-employment: Disclosing starting salaries or pay ranges in job adverts or prior to interviews and not asking questions about candidates’ pay history.
Transparency of pay setting and pay progression policy: Ensuring salaries and pay progression are based on objective, gender-neutral criteria, and that employees can access policies that explain how this operates.
Right to information (RTI): Giving employees the right to ask for information about how their own pay compares to the average pay of colleagues in the same role or in roles of equal value.
Reporting on pay gaps between female and male workers: Reporting by companies with 250+ employees on key pay gap metrics.
Joint pay assessments: A mandatory action plan triggered when a pay gap of 5% is reported, cannot be justified on the basis of objective, gender-neutral criteria, and has not been remedied within six months of reporting.

These are the minimum requirements, but member states may choose to go beyond these standards. Many countries already had some degree of pay transparency legislation in place; these can remain in place provided they meet or exceed directive requirements.

Divergence in implementation

What can already be seen is clear divergence in how countries are implementing (or proposing to implement) the directive in their own legal systems.

Some examples of this include:

Ireland and Italy have announced they will require starting salaries or pay ranges to be included on all job adverts, rather than have the option for employers to provide this ahead of interviews.
Italy has restricted right to information (RTI) requests to one per employee every 12 months – despite the directive itself not having a limit on frequency of these requests.
Malta has significantly reduced the deadline for responding to RTI requests from two months to eight days.
Cyprus has gone further on a significant number of requirements, including detailed documentation on the weighting used in assessing roles of equal value, and personal criminal liability for directors.

This variation introduces complexity for multinational employers, who will need to navigate different legal obligations, timelines and process in each country.

Progress to date

To date, only four EU member states - Slovakia, Italy, Lithuania and Malta - have met the deadline to transpose the directive into national law.

Several countries, including Ireland and Denmark, have announced delays, while others – such as Austria, Bulgaria and Croatia - have yet to announce an expected implementation date.

The next few countries to transpose the directive into law could include France, Germany, Spain, Portugal, Czechia, and Finland. These countries are all in the draft stage for implementation and are expected to implement during 2026, with most employer obligations likely to commence in 2027.

Notably, Sweden has attempted to challenge the directive, withdrawing a published transposition law and calling for renegotiation at EU level. They have argued that it is incompatible with their constitution and will have a high administrative burden on employers. However, there is no realistic prospect of renegotiation, and the most likely outcome is delayed and minimalist transposition, not reversal.

The impact of uncertainty on employers

Unsurprisingly, many employers do not feel ready. A recent study indicated that only 9% of Europe-based employers had a full transparency strategy in place.

Divergence between the directive and national implementation has already caused uncertainty - particularly around job architecture and RTI processes.

As each country adopts its own interpretation, a fragmented compliance landscape is emerging, increasing both operational complexity and reputational risk for employers with cross-border workforces.

Looking ahead

Although the directive formally applies only to employers operating in EU member states, many multinational organisations are choosing to prepare early.

Employers need to be aware that, until the directive has been transposed into national law in the countries in which they operate, full compliance requirements will remain uncertain. Rather than waiting for clarity on minimum standards, organisations should adopt a long-term, strategic approach – building solid foundations now that will allow them to meet both legal requirements and the spirit of the directive, while also harnessing the broader advantages of pay transparency.

Turning Point recommends focusing on:

Developing consistent job architecture frameworks
Strengthening the objectivity and fairness of pay decisions
Enhancing transparency in communication with employees and candidates

Taking a proactive, principles-led approach and reviewing these elements now will allow employers to establish strong foundations for what comes next in their country, while building trust, strengthening employer brand, and improving talent outcomes.

In a landscape defined by uncertainty and divergence, early strategic action is likely to be a differentiator.