A Milestone for Equality and Fairness
The EU Pay Transparency Directive marks a significant step toward greater equality in the workplace. Its goal is clear: Equal pay for equal or equivalent work, regardless of gender. By June 7, 2026, this directive must be implemented into German law. For You as an employer, this means reviewing and adjusting your salary structures and HR processes.
What is the EU Pay Transparency Directive?
Directive (EU) 2023/970 was adopted on June 6, 2023, and obligates all EU member states to take measures to promote pay transparency. The aim is to combat pay discrimination and close the gender pay gap. The directive is based on the principle that every worker has the right to equal pay for equal or equivalent work.
What Changes for Employers?
Transparency in Job Postings
From now on, You must disclose the starting salary or a salary range in your job postings, or at the latest before the interview. It will also no longer be allowed to ask applicants about their previous salary. These measures are intended to promote transparency in the application process and make salary negotiations fair.
Right to Information for Employees
Employees will have the right to request information about their own salary as well as the average income of comparable colleagues, broken down by gender. This information must be provided within two months and is meant to help uncover potential inequalities.
Regular Reporting
Companies with at least 100 employees will be required to report regularly on the gender pay gap. The reporting obligations are staggered:
- Starting from 250 employees, annually
- From 150 employees, every three years
- From 100 employees, starting in 2031, also every three years
These reports are meant to create transparency and encourage companies to analyze and eliminate existing wage disparities.
Remedying the Gender Pay Gap
If the wage gap is 5 percent or more and cannot be objectively justified, You are required to carry out a salary evaluation together with employee representatives and take measures to eliminate the inequality. These measures must be documented and made accessible to the relevant authorities and employees.
Reversal of the Burden of Proof
In the event of a dispute, the burden of proof will lie with You as the employer. You must prove that wage differences are not discriminatory. This regulation strengthens the position of employees and increases pressure on companies to establish transparent and fair salary structures.
What Does This Mean for Your HR Work?
The implementation of the directive requires a comprehensive review and adjustment of your HR processes:
- Analyze salary structures: Review your current salary structures for potential inequalities and develop objective criteria for salary decisions.
- Create transparency: Ensure that all employees have access to information about salary structures and development opportunities.
- Use HR software: Modern HR software can help make compensation models transparent, create reports, and make fair salary decisions.
- Train employees: Raise awareness among your leadership team and employees about pay transparency and train them on the new regulations.
Opportunities for Employers
The EU Pay Transparency Directive offers not only challenges but also opportunities:
- Increase trust and satisfaction: Transparent salary structures foster trust and satisfaction among your employees.
- Reduce turnover: Fair compensation can help strengthen employee retention and reduce turnover.
- Increase attractiveness: As a company that practices transparency and equality, You will be more attractive to new talent.
- Strengthen company culture: Implementing the directive can be a catalyst for fostering an open, diverse, and future-oriented company culture.
Conclusion: Become a Pioneer for Fairness and Equality
The EU Pay Transparency Directive is more than just a legal obligation – it’s an opportunity to strengthen your company culture and position yourself as a modern employer. By placing transparency and fairness at the heart of your HR strategy, You can not only meet legal requirements but also increase the trust and satisfaction of your employees.
HelloBonnie supports you in making your processes legally compliant, transparent, and future-oriented. Together, we can tackle the challenges of the directive and create a workplace where equality and fairness are the norm.
