Information required

Employers will be required to provide gender pay gap information including:

• Mean and median gender pay gaps meaning the difference in pay levels between female and male workers as a percentage of the pay level of male workers.  
• Mean and median gender pay gap in “complementary or variable components” such as bonuses.
• The proportion of men and women in each quartile pay band and the proportion receiving complementary and variable components.
• The gender pay gap between workers by categories of workers broken down by basic salary and by complementary or variable components.

Timeline 

Employers will have different obligations depending on the organisation’s size.  The timing requirements differ for organisations depending on the number of workers:

• Employers with 250+ workers will need to provide pay gap information every year from 7 June 2027.
• Employers with 150 to 249 workers will need to provide pay gap information by 7 June 2027 and every three years thereafter.
• Employers with 100 to 149 workers will need to provide pay gap information by 7 June 2031 and every three years thereafter.

See also our Timeline on our EU Pay Transparency Directive Hub here. 

It is also worth noting that Member States will be able to impose more onerous requirements on employers, which means that employers who do not fall within the Directive’s thresholds may still come under domestic pay gap reporting legislation.

Reporting requirements

Reports must be made available to workers, worker representatives, and supervisory authorities who can ask for clarification about the data provided, to which employers will be obliged to respond.  Management will be obliged to confirm the accuracy of the information following consultation with worker representatives who will need to have access to the methodologies applied by the employer. Employers can also choose to make reports publicly available on their websites or elsewhere and some employers may choose to do so to give them more control over the narrative.

Remedying the gap and Joint Pay Assessments

Employers will be under an obligation to remedy a gender pay gap which is not justified by objective, gender-neutral factors within a reasonable period of time.

If a report shows a gender pay gap of 5% or more in a worker category that cannot be justified by objective, gender-neutral factors and is not fixed within six months, employers must conduct a joint pay assessment with employee representatives. This assessment involves analysing the causes and developing solutions for the pay differences. 

It is effectively an audit of the gender pay gap and involves identifying and publishing more detailed data than required for the initial reporting requirements which can be time-consuming and burdensome for employers.  It needs to be carried out in cooperation with worker representatives with the aim of identifying, remedying and preventing unjustified pay gaps.

The joint pay assessment will need to be made available to workers, worker representatives and supervisory authorities. 

What are the uncertainties?

There are still certain elements of the Directive which are not yet clear.  As each Member State transposes the Directive into their national legislation there will be variations between jurisdictions making it difficult for organisations to implement a consistent strategy across multiple countries.  It is not yet clear how the headcount will operate especially for multi-national organisations, whether it will be based on numbers in a particular jurisdiction or a particular legal entity or connected entities.  Also, the definition of worker will vary between Member States and organisations will need clarity on how Member States will group categories of workers for reporting purposes.  Similarly, uncertainty remains over the treatment of variable pay and benefits.  Domestic legislation may provide more clarity in due course.

In terms of recruitment and pre-employment requirements, the Directive imposes several obligations on employers, regardless of size, designed to foster equal pay and pay transparency.  In particular, employers must:

• Disclose starting salary or pay range: This information should be provided in the job advertisement or before the interview stage, based on objective and gender-neutral criteria.  If a collective bargaining agreement applies to the position, employers should also provide information about relevant salary provisions.
• Prohibit inquiries about salary history: Employers are forbidden from asking candidates about their previous salaries, preventing historical pay inequalities from influencing new offers.
• Ensure gender-neutral job descriptions and titles: This aims to prevent discrimination in the recruitment process and promote equal opportunities.
• Adhere to non-discriminatory recruitment processes: Employers must ensure their overall recruitment practices are fair and do not undermine the right to equal pay for equal work or work of equal value.

These requirements aim to empower job applicants by providing them with upfront information about potential compensation, enabling them to make informed decisions and negotiate salaries more effectively. 

For existing workers, the Directive provides: 

• Easy access to pay setting criteria from employers: This includes criteria used to determine workers’ pay, pay levels and pay progression.  Criteria must be objective and gender neutral.  Member States can provide for a small employer exemption from these requirements for employers with fewer than 50 workers.
• The right to request information on their individual pay: Workers can request written information on their individual pay and the average pay levels, broken down by sex, for workers doing the same job or work of equal value.  Employers must provide the requested pay information within a reasonable period, and within two months.
• An annual reminder of the right to request information: Employers must inform all workers annually of their right to receive this pay information and how to request it.
• A limit on restricting workers disclosing pay information: Employers cannot prevent workers discussing their pay information to enforce equal pay rights.  Member States will also be required to put measures in place to prohibit contractual terms that try to restrict workers disclosing information about their pay to others.

Member States are required to implement national laws that include effective, proportionate, and dissuasive remedies and enforcement mechanisms for violations of the Directive. These may include: 

• Right to Compensation: Workers will have the right to claim full compensation for losses and damages sustained arising from breaches of equal pay rights.  This compensation can include back pay, related bonuses, payments in kind, compensation for lost opportunities, and non-material damages.  Member States will be prohibited from setting an upper limit on the amount of compensation that can be awarded.
• Shift in the Burden of Proof: In equal pay claims under the Directive, the burden of proof will shift to the employer to demonstrate that no discrimination occurred if an employee presents facts that suggest discrimination. This will strengthen the worker's position in pursuing claims for unequal pay.
• Orders to Stop the Infringement: Competent authorities or courts will be able to order employers to stop the infringement and implement measures to ensure the principle of equal pay is applied.  They can also mandate the disclosure of relevant evidence needed to pursue an equal pay claim.
• Penalties and Fines: Member States will be obligated to establish penalties for breaches of the equal pay principle and related obligations, including fines that are effective, proportionate, and dissuasive.  These penalties should be designed to deter employers from engaging in discriminatory pay practices.

Take a look at our EU Pay Transparency Directive Implementation Tracker which gives an overview of the progress that has been made in each Member State towards transposing the Directive into national legislation here. 

While the EU Pay Transparency Directive does not directly affect the UK, many multi-national employers with UK and EU operations may be looking to implement pay transparency provisions to ensure uniformity across its organisation.  See below for practical steps employers should take to prepare. 

The UK Government has recently consulted on the introduction of mandatory ethnicity and disability pay gap reporting and we await the response to that consultation which closed on 10 June 2025, and which will help shape the draft Equality (Race and Disability) Bill expected to be published later this year.  The UK Government also opened a call for evidence looking at wider equality law reforms in the UK.

Among the ideas put forward in the call for evidence, the Government is seeking views on improving pay transparency.  It states that it is committed to strengthening equal pay rights and pay gap requirements but wants to explore the evidence and learn from employer best practices before deciding whether any changes would be appropriate.

The call for evidence asks about the impact certain measures which employers can take to improve pay transparency would have on organisations including:

• Providing the specific salary or salary ranges of a job on the job advert or prior to interview.
• Not asking candidates their salary history.
• Publishing or providing employees with information on pay, pay structures and criteria for progression.
• Providing employees with information on their pay level and how their pay compares to those doing the same role or work of equal value.
• Identifying actions that they need to take to avoid equal pay breaches occurring or continuing.

The UK Government will use the call for evidence to inform future policy development.

While the UK is not directly bound by the EU Pay Transparency Directive, many UK employers will still be impacted by the changes.

UK employers with operations in EU Member States will need to comply with the Directive's requirements in those specific locations. Many employers may also want to align their equal pay processes across the organisation to avoid any operational challenges and inconsistencies of having different equal pay processes within their workforce.  

As we have seen, the UK government is showing an interest in strengthening pay transparency and equality measures, potentially taking inspiration from the EU Directive and with pay transparency becoming a global trend, employees are increasingly expecting openness about pay structures and fairness.  For UK-based companies, even without a direct legal obligation, proactively addressing pay transparency will be important for attracting and retaining talent and mitigating potential future risks.

Key preparations include:

1.    Review your current pay practices:

• Review policies and procedures: examine recruitment, performance management, promotion and pay progression policies to ensure they are unbiased and equitable. 

2.    Establish robust and transparent pay practices:

• Assess your job and grading structure: Ensure you have a clear and objective system for classifying roles and determining "work of equal value" using gender-neutral criteria.  This is crucial for conducting accurate pay gap analysis.
• Establish transparent pay practices: Develop a clear, gender-neutral pay philosophy and strategy to guide decisions on pay. Create structured, gender-neutral salary bands to justify pay levels and ensure consistency.  Ensure criteria for pay are transparent.

3.    Review and Adapt Recruitment Processes:

• Review job advertisements and provide pay information: Ensure job advertisements, job descriptions, job titles and classification structures are gender-neutral and include salary ranges or initial pay levels in job postings or before recruitment interviews.
• Review recruitment processes: Ensure recruitment processes are gender-neutral and remove any questions about salary history.

4.    Prepare for data collection and increased reporting:

• Collect and analyse data: Ensure systems can track and report gender pay gap data by worker category and pay components.
• Dry run reporting scenarios: Consider running a trial pay audit using the Directive’s parameters to identify any existing pay gaps and address existing disparities. 
• Educate managers and employees: Provide training and guidance to managers on having transparent conversations about pay, handling information requests and potential joint pay assessments. Develop a clear communication strategy for employees regarding pay policies, structures, and potential future changes.
• Employee representatives: Engage with employee representatives throughout the process.

5.    Monitor legislative developments: 

• Keep updated: Stay up to date on how the Directive is being transposed into national law in relevant countries, as local requirements may differ or be more stringent than the Directive’s minimum standards.