Pay Transparency Directive: first gender pay gap reports

The Pay Transparency Directive, Directive (EU) 2023/970, applies the principle of equal pay for men and women for the same work or work of equal value. It does so through transparency: workers and candidates get information on pay, and employers report on the gender pay gap (Directive (EU) 2023/970 (external site)).

The gender pay gap is the difference between the average pay of men and women, expressed as a percentage of men's average pay (Directive (EU) 2023/970 (external site)).

Before employment, candidates receive information on the starting pay or its range, and employers may not ask about pay history. During employment, workers have a right to information on average pay levels, by sex, for workers doing the same work or work of equal value (Directive (EU) 2023/970 (external site)).

Employers with 100 or more workers report a fixed set of indicators. They include the mean and median gender pay gap, the gap in variable pay such as bonuses, and the share of women and men in each quartile pay band (Directive (EU) 2023/970 (external site)).

When the report shows a gap of at least 5 percent in a category of workers that is not justified by objective, gender-neutral criteria and not corrected within six months, the employer carries out a joint pay assessment with workers' representatives (Directive (EU) 2023/970 (external site)).

As an example only: if men in a category earn on average EUR 30 an hour and women EUR 27, the gap is 10 percent of men's pay. Without an objective justification or a correction within six months, a gap of that size leads to a joint pay assessment (Directive (EU) 2023/970 (external site)).

The directive applies to all employers in the public and private sectors, including every financial institution, with reporting duties scaled by number of workers (Directive (EU) 2023/970 (external site)). The roles most directly concerned:

• Regulatory Change Analyst: national transposing laws are compared country by country with the directive.
• Compliance Officer: the reporting deadlines and the joint pay assessment become controlled obligations.
• Data Analyst: the indicators are calculated from payroll and job data.
• Data Governance Analyst: categories of workers and pay components need consistent definitions across systems.
• Data Protection Specialist: pay information shared with workers and authorities involves personal data.
• Programme Manager (Banking): national transposing laws and the first reporting date set a dated plan across countries.

The directive entered into force in June 2023. Member States had to transpose it into national law by 7 June 2026, under Article 34 (Directive (EU) 2023/970 (external site)).

Employers with 250 or more workers report by 7 June 2027 and every year after. Employers with 150 to 249 workers report by 7 June 2027 and every three years. Employers with 100 to 149 workers report by 7 June 2031 and every three years; all these dates are confirmed in Article 9 (Directive (EU) 2023/970 (external site)).

Equal pay for men and women is a principle of the EU Treaties, set out in Article 157 of the Treaty on the Functioning of the European Union (TFEU). Directive 2006/54/EC already prohibited pay discrimination between men and women (Directive (EU) 2023/970 (external site)).

The 2023 directive sets minimum requirements to strengthen the application of both. Where an employer has not met its transparency duties, it is for the employer to prove in administrative or court proceedings that there was no pay discrimination (Directive (EU) 2023/970 (external site)).