What are the deadlines for the Pay Transparency directive?

The European Pay Transparency Directive, marks a big step toward closing the gender pay gap. This Directive, formally known as Directive (EU) 2023/970, introduces a set of regulatory instruments for pay transparency to combat gender-based pay discrimination. Its implementation is important for ensuring equal pay for equal work or work of equal value between men and women, and other demographic groups. This article highlights the key deadlines associated with this Directive, providing a clear roadmap for compliance by member states and companies.

Deadline for Implementation of the Law

The Directive sets a clear timeline for member states to translate its requirements into national law. By June 7, 2026, member states are obliged to have the necessary legal frameworks to comply with the Directive in place. This deadline ensures a uniform approach across the EU for mitigating pay discrimination. Member states are expected to have their laws, regulations, and administrative processes in place, ensuring adherence to the Directive’s standards.

Reporting Deadlines

One of the Directive's core elements is the obligation for employers to report on pay gaps between female and male employees. These reporting requirements differ based on the number of employees in the company:

• Large Employers (250 or more employees): Starting June 7, 2027, and annually thereafter, these employers must report on the pay gap in accordance with the directive.
• Medium-sized Employers (150-249 employees): From June 7, 2027, and every three years subsequently, these employers are required to report.
• Smaller Employers (100-149 employees): These employers have a reporting obligation beginning June 7, 2031, and every three years thereafter.

Member states have the discretion to require smaller employers (less than 100 employees) to report, either mandatorily or on a voluntary basis. Furthermore, in counting the number of employees, it must include all types of employees.

Deadlines for Employee Salary Reports

Under the Directive, employees have the right to obtain information about pay levels and pay gaps in their company. This is a large step towards transparency and addressing pay inequality. Employers are obliged to provide this information within two months of an employee’s request. The  Directive empowers employees to be more informed about their pay structures, which implicitly will function as a mechanism of enforcement.

Deadlines for Mitigating Pay Gaps

Upon identifying unjustified pay gaps, employers are mandated to take action in order to lower their pay gaps. If a pay report reveals a gender pay gap of at least 5% in a category of workers without justifying it based on objective gender neutral pay criteria, the employer must conduct a joint pay assessment with workers' representatives. The Directive stipulates that unjustified pay differences should be remedied within a six months following the joint pay assessment. This aspect of the Directive ensures that pay gaps are not just identified but are also actively addressed.

Conclusion

The Pay Transparency Directive sets forth a series of important deadlines which enforces the agenda of gender pay equality in the European Union. The implementation deadline of June 7, 2026, for member states, the staggered reporting deadlines for companies of different sizes, and the prompt response required for employee pay information requests and pay gap mitigation, collectively form a comprehensive approach to tackle pay inequality. As these deadlines approach, it is important for employers to prepare thoroughly, ensuring that they will be compliant once the first reporting period starts, and to avoid uncomfortable surprises. PayGap’s platform will automatically help you get started on this journey, and also ensure that you will not miss any important deadlines related to the directive.

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