Despite the 2026 deadline mandating all EU member states to meet pay transparency requirements, employers with EU operations should prepare immediately, understanding new obligations, ensuring compliance to avoid potential legal risks, and establishing trust among their workforce. 

All EU member states have until 7 June 2026 to transpose the provisions of the EU Pay Transparency Directive into national law. With new rules on reporting, affected employers will be required to submit gender pay gap reports by 6 June 2027, based on 2026 data. With the clock ticking, employers operating in the EU need to take decisive action and prepare for the new rules.

Start preparing now. By understanding new obligations and ensuring compliance, you can avoid potential legal risks and build trust within your workforce.

Don’t lose out to your EU competitors in the race for talent. Download “A quick guide to the EU Pay Transparency Directive” now. 

What rules are changing in the EU?

Although the right to equal pay between women and men for equal work or work of equal value has been enshrine in EU law since the Treaty of Rome in 1957, current gender equality legislation has not addressed pay imbalances between men and women.

The EU is hoping that the EU Pay Transparency Directive will address these issues by requiring organisations to:

• report information relating to the gender pay gap;
• carry out joint pay assessments where pay reporting reveals a gender pay gap of at least 5%;
• provide information about the initial pay level or its range in job adverts;
• make available the criteria that are used to determine pay levels and progression; and
• allow employees to ask for information on their individual and average pay levels, broken down by sex.

EU member states will need to put measures in place to prohibit any contractual terms that aim to restrict workers from revealing information about their pay.

If an employee brings a claim alleging a breach, the employer will bear the burden of proof. Employees who have suffered gender pay discrimination will be entitled to compensation, including back pay and related bonuses or payments in kind, and compensation for lost opportunities.

Further, EU member states will also be required to establish specific penalties for violations, including fines.

As the UK is no longer an EU member state, there is no requirement to implement the Directive. However, a UK company that has more than 100 employees based in EU member states will need to comply with the legislation. Multinational employers may wish to adopt the same approach for all their employees across the region or align to EU standards.

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