Fundamentals
The EU Pay Transparency Directive (EU) 2023/970 at a glance
Directive (EU) 2023/970 – the EU Pay Transparency Directive – requires employers across the EU to make pay transparent: from pay ranges in job postings and workers’ information rights to regular gender pay gap reporting. Its goal is to enforce the principle of equal pay for equal work or work of equal value between women and men.
Who the Directive applies to
Under Article 2, the Directive applies to private and public sector employers and to all workers with an employment contract or employment relationship – including part-time and fixed-term workers and, for several duties, job applicants. There is no general small-business exemption: recruiting transparency and the information right apply regardless of employer size.
Reporting duties, by contrast, are size-dependent: they start at 100 workers and are tiered at 100–149, 150–249 and 250+ workers.
What counts as pay
The Directive defines pay broadly (Article 3): it covers basic salary as well as any other consideration workers receive directly or indirectly in cash or in kind – bonuses, allowances, overtime pay, company cars, meal subsidies, occupational pensions and equity.
Comparisons are based on the value of work, not job titles: under Article 4, employers must determine equal and equivalent work using objective, gender-neutral criteria – skills, effort, responsibility and working conditions.
The core obligations
The Directive bundles several sets of obligations that are connected in time and operation:
- Pay transparency before employment (Article 5): starting pay or a pay range must be disclosed to candidates in advance; questions about pay history are prohibited.
- Disclosure of pay criteria (Article 6): criteria for pay, pay levels and pay progression must be objective, gender-neutral and easily accessible.
- Information right (Article 7): workers may request their individual pay level and the average pay levels, broken down by gender, for equal or equivalent work.
- Reporting duties (Article 9): employers with 100 or more workers report regularly on the gender pay gap.
- Joint pay assessment (Article 10): an unexplained gap of at least 5% in a worker category triggers a joint assessment with worker representatives and remediation.
Enforcement and penalties
The Directive significantly strengthens enforcement: workers are entitled to full back pay (Article 16), the burden of proof shifts to the employer when there is prima facie evidence of pay discrimination (Article 18), and Member States must provide effective, proportionate and dissuasive penalties including fines (Article 23).
The practical consequence: employers who do not document pay structures, evaluation criteria and decisions will struggle to defend themselves in a dispute. Evidence management is the core of compliance, not an optional extra.
Transposition into national law
The transposition deadline for Member States expired on 7 June 2026. Germany and Austria are working on implementation acts; in Austria, transposition is expected through amendments to the Equal Treatment Act and the Labour Constitution Act, but no act has been promulgated yet (as of July 2026). Employers should follow the EU baseline and monitor national specifics closely.
Frequently asked questions
When does the EU Pay Transparency Directive apply?
The Directive entered into force in June 2023. Member States had to transpose it by 7 June 2026; the first pay gap reports of large employers are due by 7 June 2027.
Does the Directive apply to small employers?
Yes. Recruiting transparency, disclosure of pay criteria and the information right apply regardless of size. Only the Article 9 reporting duties start at 100 workers.
What is the difference between equal work and work of equal value?
Equal work is the same activity. Work of equal value covers different activities that have the same value based on objective criteria such as skills, effort, responsibility and working conditions.