The European Union has adopted Directive (EU) 2023/970 Equal Pay and Pay Transparency also known as EU Pay Transparency Directive 2026 to strengthen the principle of equal pay for equal work or work of equal value between men and women.
This EU legislation focuses on pay transparency and enforcement of the wage systems to make it more transparent and reduce gender-based pay discrimination.
The Directive was published on May 17, 2023, and is since then in force. Each EU member state must implement the Directive into national law, before June 2026.
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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 systematic 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. Each European employer will have to implement the Directive into national law by June 2026.
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.
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.
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.
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.
4. Coverage Across Worker Types
The EU Pay Transparency Directive applies broadly across employment relationships, covering part-time employees, fixed-term employees, trainees, platform employees, and others where work is performed, regardless of how an employment contract is labelled.
Implementation Timeline & 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. However until this date no member state, to date, has fully completed the implementation.
Employers should actively monitor how the Directive is being implemented in their specific jurisdictions.
Click on the country 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 Implementation Tracker.
Deadline June 2026: EU Pay Transparency Directive into National Law
The EU Directive sets minimum standards. National employment laws may introduce stricter rules, provided they remain compatible with EU law principles.
The Netherlands has announced it will not meet the EU’s June 2026 deadline for transposing the Pay Transparency Directive into national law, with implementation now expected in January 2027.
In conclusion, while the EU has not yet announced specific penalties for member states missing the 2026 deadline, the European Commission can initiate infringement procedures against non-compliant member states.
FAQs: 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?
Once the Directive is implemented into national law in each EU member state, all employers in the European Union, regardless of size, and industry, will need to ensure their pay systems meet the Directive’s transparency and non-discrimination requirements.
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.
Will employers need to publish pay data under the EU Pay Transparency Directive?
This is depending on national law. Employers in the European Union may be 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.
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.
