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The European Union has adopted Directive (EU) 2023/970 Equal Pay and Pay Transparency also known as EU Pay Transparency Directive. This Directive aims to strengthen the principle of equal pay for equal work or work of equal value between men and women.
This EU legislation strengthens pay transparency and enforcement of the equal pay principle to reduce gender-based pay discrimination. The Directive was published on May 17, 2023, and entered into force on June 6, 2023. Each EU Member State must implement the Directive into national law by June 7, 2026.
AT A GLANCE
EU Directive 2023/970: Equal Pay and Pay Transparency
The EU Pay Transparency Directive builds on the EU’s existing equal pay framework. The Directive introduces binding measures for employers to ensure transparency in pay systems and to make it easier for employees to identify and challenge discriminatory pay practices.
Pay gaps between men and women remain a systemic issue across EU member states. EU law already prohibits pay discrimination, but unequal pay often persists because wage structures are not transparent and enforcement mechanisms are weak.
The Directive Equal Pay & Pay Transparency steps in to:
- Clarify key concepts such as pay and work of equal value.
- Improve pay transparency.
- Strengthen enforcement and remedies for employees.
What Is an EU Directive
EU law becomes effective in EU member states through two main types of legal instruments: EU Regulations and EU Directives.
- EU Regulations: These laws automatically become binding in all EU member states without needing to be transposed into national law.
- EU Directives: Directives set goals that all EU countries must achieve, but each country decides how to implement them, but the EU sets the deadline.
The EU Pay Transparency legislation is a Directive. The Directive obliges EU employers to take concrete actions in respect of pay transparency and discrimination prevention.
EU Member States are responsible for transposing the Directive into national law. Employers must comply with the applicable national implementing legislation.
Scope of Application
The EU Pay Transparency Directive applies to both public and private employers across EU Member States. It covers job applicants and employees, including full-time, part-time, fixed-term, temporary agency employees, trainees, and on-demand employees, based on actual work performed.
Objectives of the Equal Pay and Pay Transparency Directive
The primary objective of the Directive is to reduce gender pay gaps by improving transparency, strengthening enforcement mechanisms, and shifting the burden of proof to employers in pay discrimination cases.
Key Legal Obligations Introduced by the Directive
Employers must ensure pay transparency prior to employment, provide access to pay level information, report gender pay gaps, and justify pay differences based on objective and gender-neutral criteria.
Step 1. Pay Reporting & Transparency
Firstly, Employers will be required to review and report on their pay systems to demonstrate that employees performing the same work or work of equal value are paid equally. Transparent pay practices support employees understand how pay is determined and identify unlawful disparities.
Employers must provide applicants with starting pay information or a pay range and must not ask about pay history. Workers have rights to information about their individual pay and average pay levels, broken down by sex, for comparable work. Periodic gender pay gap reporting applies according to workforce thresholds and national legislation.
Step 2. Clarification of Pay Criteria
The EU Pay Transparency Directive clarifies how pay and work of equal value should be defined and assessed. Wage systems and job classification processes must be free of gender bias and based on objective criteria that are neutral and non-discriminatory.
Step 3. Enforcement Mechanisms
Employees must have access to effective procedures to challenge discriminatory pay decisions. This includes the right to seek compensation where discriminatory pay practices are proven.
Step 4. Coverage Across Worker Types
The Directive covers public and private employers and workers with an employment contract or employment relationship recognised under national law, taking account of EU case law. Job applicants are covered by the pre-employment transparency provisions. Trainees and platform workers are covered where they qualify as workers .
Implementation Timeline and Member State Transposition
The Directive (EU) 2023/970 was published in the Official Journal of the European Union on May 17, 2023. Each EU member state, including the Netherlands must transpose the Directive into national law, before June 2026.
Many European Union member states have presented draft proposals to transpose the EU’s pay transparency Directive into their national law. Implementation status varies between EU Member States. Employers should check whether national measures have been adopted, when they apply and whether further implementing rules are required.
Employers should actively monitor how the Directive is being implemented in their specific jurisdictions.
Click on the link and discover the current status of the implementation in each local country. Ongoing updates and country-by-country progress across the EU are available via the EU Pay Transparancy Directive Implementation Tracker.
EU Transposition Deadline and Netherlands Implementation
The EU Directive sets minimum standards. National employment laws may introduce stricter rules, provided they remain compatible with EU law principles.
The Netherlands did not meet the EU transposition deadline of June 7, 2026. The government targets January 1, 2027 for commencement, subject to completion of the legislative process. The Bill 36949 was submitted on May 21, 2026 and amended on September 2, 2026.
The European Commission can initiate infringement proceedings against Member States that fail to fulfil their transposition obligations. These proceedings may lead to a referral to the Court of Justice and financial penalties under the applicable EU procedures.
Frequently Asked Questions
Equal Pay & Pay Transparency Directive
What Is the purpose of Directive (EU) 2023/970?
The EU Pay Transparency Directive is designed to improve the equal pay principle across the European Union. This should be done by improving transparency and enforcement mechanisms to reduce gender-based pay discrimination.
Who Must Comply with the Equal Pay & Pay Transparency Directive?
The Directive covers public and private employers. Once the Directive is implemented into national law in each EU member state, all employers in the European Union will need to ensure their pay systems meet the Directive’s transparency and non-discrimination requirements. Specific obligations and exemptions may vary, including according to workforce size and national implementing legislation.
Does this Directive Change what Equal Pay Means?
It does not change the core legal principle of equal pay, but it clarifies definitions (e.g., pay, work of equal value) and boost transparency and enforcement measures.
Are All Employees Protected by the EU Pay Transparency Directive?
Yes, the EU Pay Transparency Directive applies broadly to employees, including full-time, part-time, fixed-term, temporary agency employees, trainees, and on-demand employees, based on actual work performed.
Self-employed platform workers and every trainee are not automatically covered
Will Employers Need to Publish Pay Data under the EU Pay Transparency Directive?
Employers in the European Union are required to report or disclose certain pay information to demonstrate compliance. This typically involves internal reporting and may extend to public reporting obligations under national regimes.
- Employers with at least 250 workers report annually from June 7, 2027.
- Employer with 150 to 249 workers report every three years from that date.
- Employer with 100 to 149 workers report every three years from 7 June 2031.
The reports cover the previous calendar year and national law may extend reporting. Specified data are made public through the designated national body; publication on the employer’s own website is optional under the Directive.
What Happens if an Employer Fails to Comply with the Equal Pay & Pay Transparency Directive?
Member States must ensure effective and proportionate penalties under national law for discriminatory pay practices and for failing to meet transparency or reporting obligations.
Preparing Your Organisation for Pay Transparency
Pay transparency requires preparation across recruitment, remuneration, HR processes and employee communication. Employers should assess whether their current pay structures and job classification systems use objective, gender-neutral criteria and whether their payroll data can support the applicable reporting requirements.
Start by reviewing recruitment practices, documenting how pay decisions are made and establishing a process for responding to employee information requests. Assign clear responsibilities to HR, payroll and management, and assess the involvement of employee representatives under the applicable national rules.
For organisations operating in several EU Member States, a coordinated approach should also account for differences in national legislation and implementation dates.
Human in Progress supports employers and HR professionals in reviewing HR processes, preparing internal policies and coordinating Works Council involvement. Please contact us to discuss the preparation required within your organisation.
