The EU Pay Transparency Directive: Does It Affect You? 

French member firm, FIDERE Avocats, shares news on the major updates of the EU Pay Transparency Directive and what this will mean for businesses in 2026.

Please note that the information below also depends on the content of your local transposition law. 

1. Who will be affected? 

The directive applies to all employers in EU member states, whether public or private, regardless of their workforce size. Most of the new rules will therefore apply to all companies, large and small. 

Pay gap reporting obligations will apply only to larger companies, with more than 100 employees according to the Directive or fewer depending on your local transposition law. 

2. When will it come into force? 

Member states have until June 7, 2026, to comply with the directive and transpose it into national law. 

The first pay gap reporting will have to be disclosed:  

• By June 7, 2027 based on data from the year 2026 for companies with 150 employees or more 

• By June 7, 2031 based on data from the year 2030 for companies with 100 to 149 employees 

3. What does the directive require from companies? 

The directive imposes new obligations on employers about candidates, employees and pay gap reporting. 

Failure to comply with these rules may result in administrative penalties, the amount of which will most likely depend on the number of employees or the seriousness of the breach. 

Regarding job applicants: 

• Employers will be prohibited from asking job applicants for their compensation history during their current or previous employment relationships 

• Job applicants will have the right to receive information from the prospective employer about the initial pay or initial pay range 

Regarding employees: 

• Workers will have the right to request and receive in writing information on their individual pay level and the average pay levels, broken down by sex, for categories of workers performing the same work as them or “work of equal value” to theirs. This information will have to be provided within two months of the request 

• Employers will have to provide information regarding workers' right to obtain this information every year 

Reporting and disclosure requirements: 

Companies will have to provide the following information every year or every three-years depending on their size: 

(a) The gender pay gap 

(b) The gender pay gap in complementary or variable components 

(c) The median gender pay gap 

(d) The median gender pay gap in complementary or variable components 

(e) The proportion of female and male workers receiving complementary or variable components 

(f) The proportion of female and male workers in each quartile pay band 

(g) The gender pay gap by categories of workers, broken down by ordinary base salary or wage and complementary or variable components 

This data must be communicated to the authority in charge of compiling and publishing such data (Ministry of Labour…). 

Information (a) to (f) can be published on the company's website or be made available in another manner. 

Information (g) must be provided to all workers and to the workers' representatives. It must also be disclosed to the labour inspectorate upon request.  

The timing of disclosure varies depending on the size of the company’s workforce: 

• It must be disclosed by June 7, 2027, and every year thereafter for companies with 250 or more employees 

• It must be disclosed by June 7, 2027, and every three years thereafter for companies with 150 to 249 employees 

• It must be disclosed by June 7, 2031, and every three years thereafter for companies with 100 to 149 employees 

• Companies with fewer than 100 employees may provide this information on a voluntary basis. Member states may also, under their national law, require these companies to provide information on pay 

Joint pay assessment 

Employers will have to conduct a joint assessment in cooperation with their workers' representatives if: 

(1) The pay reporting shows a difference in the average pay level between female and male workers of at least 5% in any category of workers; 

(2) The employer has not justified this difference on the basis of objective, gender-neutral criteria; 

(3) The employer has not remedied it within six months of the date of submission of the pay reporting.  

At the end of their evaluation, the employer and employee representatives are expected to present measures to address unjustified pay gaps as well as an evaluation of the effectiveness of these measures. 

4. What is a “work of equal value”?  

The obligations set out in the directive require employers to determine the categories of workers performing work of equal value, based on non-discriminatory and objective gender-neutral criteria. 

According to the EU Directive, those criteria shall include skills, effort, responsibility and working conditions, and, if appropriate, any other factors which are relevant to the specific job or position. They shall be applied in an objective gender-neutral manner, excluding any direct or indirect discrimination based on sex. 

In particular, relevant soft skills shall not be undervalued.

Keep up to date on pay transparency here

If you want to be informed of any future updates around the EU's Pay Transparency Directive then please update your preferences here.

How can CELIA Alliance help companies to comply with their obligations?  

Given the importance of the subject, CELIA Alliance is paying close attention to this issue and to the situation in each country by creating monitoring documents and charts.  

Each member firm in every EU state has full knowledge of this topic and the content of its transposition law or its adoption schedule.  

Please feel free to contact us or one of our member firms for more information.