Oct 10, 2024
What Pay Data Will Employees Receive Under the New EU Pay Transparency Rules?
The EU Pay Transparency Directive, effective from June 2026, aims to close the gender pay gap across Europe. It introduces new rules that require companies to be more transparent about how they determine pay, ensuring equal compensation for employees performing the same or equivalent work. These changes empower employees with the information needed to understand and challenge any unjustified pay disparities.
So, as an employee in the EU, what new pay-related information will you gain access to?
You’ll know the pay range for your job category
One of the most powerful rights under the directive is the ability to request information from your employer about the range of pay for your job category (i.e. roles equivalent to yours). This will help you see where your salary falls within that range and whether it aligns with what others are earning for equivalent work.
Why it matters: Knowing the pay range gives you valuable information when negotiating and allows you to confirm if there’s an unexplained gap.
You’ll know the pay range for a new role before you interview
If you're applying for a new position within your company or elsewhere, employers will need to disclose salary ranges upfront, either in the job ad or ahead of the interview process.
Why it matters: No more interviewing for a job only to find out at the final round that it pays less than you expected. You’ll know upfront whether it’s worth your time to interview.
It will be forbidden for employers to ask about your salary history
As part of the directive, employers can no longer ask for your current or previous salary during the hiring process. This change is designed to ensure that past salary inequities do not follow you into new roles, and that pay decisions are based on the role's value, not your past compensation.
Why it matters: This helps keep your pay based on the value of your skills today, not based on how you were paid for a job five years ago.
You will receive information about how your pay is determined
Under the new rules, your employer must provide clear information on how pay decisions are made, including the criteria used for setting salaries and pay progression.
Why it matters: Pay decisions can sometimes feel like a black box. Now you’ll know what factors are influencing your paycheck and how to move up the ladder.
You’ll be notified annually of your employee information rights
Employers will be required to notify you annually about your rights under the pay transparency rules, including your right to request pay information. This ensures that all employees are aware of their rights and can easily access pay data if needed.
Why it matters: It’s easy to forget your rights. This annual reminder keeps you informed and ready to act if needed.
You can see public pay gap reporting for your company
For companies with over 250 employees, employers will need to publish annual gender pay gap reports. While this reporting is anonymized, it will give you insight into whether your employer is addressing pay disparities.
Why it matters: It holds your company accountable, and you can see if pay gaps are being closed.
What if there’s a pay gap?
If your employer's report shows an unexplained pay gap of more than 5% in any job category, they must investigate the reasons for the gap and remedy it. An unexplained gap means it cannot be justified by objective factors such as skills, responsibilities, effort, or working conditions. If the gap is not closed within six months, a joint pay assessment with employee representatives will be required.
Why it matters: It’s a structured way to make sure unjustified pay gaps don’t stick around unchecked.
Employers must prove equal pay
Under the new rules, the burden of proof shifts to employers in cases of pay discrimination. If there is a claim of unequal pay, your employer must demonstrate that the difference in pay is justified by objective criteria rather than gender or other discriminatory factors.
Why it matters: This makes it a lot easier to challenge unfair pay practices.
Conclusion
The EU Pay Transparency Directive gives you more insight and control over your pay, helping ensure fairness in the workplace. With access to salary ranges, pay criteria, and the ability to challenge disparities, you'll be better equipped to make informed decisions about your compensation.
