he gender pay gap remains one of the most persistent inequalities in the European labour market. According to Eurostat, women in the EU earn on average 12.7% less than men, a figure that reflects not only differences in roles or seniority, but also systemic discrimination and a lack of clarity in pay criteria.
Against this backdrop, Directive (EU) 2023/970 was adopted on 10 May 2023 and published in the Official Journal of the European Union on 17 May. It requires Member States to transpose it into national law by 7 June 2026.
Its main goal? To strengthen the principle of equal pay for equal work, making remuneration more transparent, accessible, and comparable within both public and private organisations.
Objectives and purpose of the Directive
The Directive has a clear intention: to make the invisible visible, dismantling pay inequality through pay transparency tools. Its main objectives are to:
- Ensure that women and men receive the same pay for the same work or work of equal value.
- Enable workers to access objective and comparable salary information.
- Promote a fairer and more transparent organisational culture.
- Provide companies with concrete tools to identify and eliminate both conscious and unconscious pay discrimination.
Key changes introduced by the Directive
To make the principle of pay equity a reality, the Directive sets out a range of measures that will significantly change both company processes and workers’ rights. These changes range from access to information, to transparency in recruitment, to monitoring mechanisms and interventions in cases of significant pay gaps.
End of pay secrecy
The Directive explicitly prohibits any contractual clause that prevents employees from discussing or comparing their salaries. In addition, during the hiring process, it will be prohibited to ask candidates about their previous salary history, a key change to break the cycle of pay inequality.
Transparency in recruitment processes
Employers will be required to disclose the salary or pay range either in the job posting or before the first interview. They must also adopt neutral and objective criteria for selection and promotion, accessible to employees.
Right to pay information
Every worker will have the right to request written information on the average pay level, broken down by gender, for roles similar to their own. This must include the company’s pay structure, career progression criteria, and evaluation and bonus methods.
Mandatory reporting for companies
Companies with more than 100 employees will be required to regularly disclose gender pay gap data, with frequency depending on company size:
- Annually for companies with at least 250 employees (from 2027)
- Every 3 years for companies with 150–249 employees (from 2027)
- Every 3 years for companies with 100–149 employees (from 2031)
Reports must include information such as the average gender pay gap, pay distribution by quartile, and the share of bonuses.
Audits for gaps ≥ 5%
If a company shows a gender pay gap of 5% or more and cannot justify it with objective criteria within six months, it must carry out a pay audit in collaboration with employee representatives. The aim is to identify the causes of the gap and set concrete corrective measures.
Timeline and national implementation
The Directive has been in force at EU level since 2023, but Member States have until 7 June 2026 to transpose it into their national legislation. Some countries, such as Sweden, the Netherlands, and Belgium, have already begun the adaptation process, while others remain in the consultation phase.
Mandatory reporting will start in 2027 for larger companies, while smaller employers will have more time to adapt.
Impact on companies and workers
The Directive’s introduction will not only have regulatory effects: it will change how organisations manage pay and how employees perceive their value within the company. Understanding these impacts is essential for effective preparation.
Opportunities for companies: reputation, engagement, and attractiveness
Pay transparency can enhance an organisation’s reputation as a fair employer, increase trust and belonging among employees, and make the company more attractive to talent. In a context where younger generations see fairness as a key factor, these measures can become a competitive advantage.
Organisational challenges: adjustments and training
Compliance will require a thorough review of pay systems, updates to HR and payroll software, and the definition of clear and documented evaluation criteria. Training for managers and HR staff will also be essential to ensure transparency becomes an integral part of the company culture.
Preparing today for 2026
Directive 2023/970 is not just a regulatory requirement, it’s also a major opportunity to reshape corporate culture. 2026 is closer than it seems, and organisations that act early will be ready to benefit in terms of workplace climate, reputation, and compliance.
Actions to take now:
- Conduct an internal gender pay gap audit.
- Review and document promotion and evaluation criteria.
- Train HR teams on pay transparency and gender neutrality.
- Prepare simple, automated reporting processes.
Now is the right time to act. Addressing the change today means building a fairer, more transparent, and competitive workplace. Equality is not just an ethical goal — it’s a strategic advantage.
