In brief
Member States were required to transpose the EU Pay Transparency Directive into local law by 7 June 2026, but only Slovakia, Malta, Lithuania (on a phased basis) and Italy have implemented the full directive on time (Poland has implemented some elements of it, and in Belgium it has been implemented only in respect of a small group of public sector employers).
Greece, Bulgaria and Austria have only just published draft legislation. Of the other eleven Member States moving forward with draft laws, Czechia and the Netherlands have already confirmed delayed implementation. Meanwhile, Sweden is pushing to revisit parts of the Directive and Belgium has asked the European Commission for a six-month extension to finalize its legislation.
The result is a patchwork of confirmed and provisional compliance deadlines for employers to navigate across the European Union. With Member State transposition activity likely to continue over the summer, employers should keep preparing for compliance and be ready for day-one obligations that could potentially arise at short notice. It will be important, however, to retain flexibility of approach in order to adapt as local rules settle.
Key takeaways
- Despite delays in many Member States and requests by some business organizations for a pause in implementation, transposition activity seems likely to continue in the coming weeks and months.
- The EU Commission released an update on 8 June reiterating the importance of the Directive. Employers should continue preparing, bearing in mind they may face new obligations at short notice if the local legislative process accelerates.
- Workers’ representatives have a significant role to play in relation to many of the measures required by the Directive. Depending on local law, compliance may require consultation or reaching agreement with representatives or even election of representatives where none already exist.
- Equal value analysis is likely to be one of the most complex challenges, driving both compliance and litigation risk. Where employers opt to retain existing job architecture and grading frameworks, these will need to be tested to see whether they support a robust, gender-neutral equal value assessment.
- Operational readiness matters as much as legal timing. Employers should assess whether HR, payroll and reward systems can produce reliable data and support reporting, explanations and worker information requests.
- Non-standard worker populations create real complexity. Contingent workers, agency workers and international assignees may raise difficult questions about scope, responsibility and data treatment.
In more detail
Set out below are some of the key issues and emerging pressure points employers should take into account as part of their continued compliance preparations.
Workers’ representatives will be central to compliance
Workers’ representatives are likely to play a central role in compliance in many jurisdictions, particularly in relation to determining pay structures, the assessment of work of equal value, joint pay assessments and individual pay information requests. The scope of that role will depend on local law as will the identity of the appropriate representatives, e.g., trade union representatives, existing elected employee representatives or newly appointed representatives. Depending on the Member State, employers may be subject only to information and consultation requirements, may need formal agreement from representatives, or may have to arrange elections where no representative body is in place.
In practice, employers should identify existing representative structures, where new representation may be needed, and which stakeholder relationships will matter most as implementation develops. They should also consider when to engage. Early dialogue may help avoid later difficulties, but some employers may prefer to complete internal analysis first so that communications, data and governance are in place before broader engagement begins.
Equal value analysis within an existing job architecture
Defining categories of workers and assessing whether roles involve the same work or work of equal value is likely to be one of the most difficult practical issues under the Directive. Most employers already have job architecture, grading or reward frameworks, but these are often organized by job family, business line or management structure rather than the broader, cross-organizational analysis the Directive requires.
Recent guidance by the European Commission working with the European Institute for Gender Equality in the form of a 150-page toolkit on job evaluation sets out clear expectations for the form of evaluation the Commission expects employers to have conducted.
In practice, however, most employers are not redesigning their structures from scratch. Instead, they are testing whether current grading or job architecture frameworks can be adapted, supplemented or better documented to support equal value analysis. However, common weaknesses in existing frameworks can include limited or non-existent treatment of required evaluation factors such as working conditions, limited documentation explaining why roles have been grouped together or differentiated, and uncertainty over how to compare jobs across business units or legal entities. These issues affect not only future reporting, but also responses to information requests, the defense of pay differentials and the assessment of whether any gap can be objectively justified.
For many employers, the most practical approach will be to test existing frameworks now, address obvious weaknesses and avoid wholesale redesign until the local legal position is clearer.
Day-one readiness will depend on data, systems and communications – and may be tested at short notice
Even where implementation is delayed, employers may need to comply at short notice once local rules take effect, so operational readiness matters as much as legal timing. A key priority is ensuring HR, payroll and reward systems can produce reliable pay data that can be analyzed, explained and, if required, reported.
Important questions remain open, including the relevant snapshot date, reference period and which elements of pay should be included. Some employers are working towards a total-remuneration model, while others are starting with basic pay because it is simpler to extract and validate. Whatever approach is taken, organizations should assess now what data they hold, what is missing and how easily meaningful outputs can be generated.
Readiness also depends on communication. Recruiters, managers and HR teams may need training on pay range disclosures, pay history restrictions and responding to employee or candidate questions. Employers should also prepare clear explanations of pay structures, criteria and information rights.
Data privacy adds further complexity, especially where small comparator groups risk indirect identification, so employers will need a practical approach to disclosure and aggregation.
Contingent workers and other atypical populations remain a difficult area
The treatment of contingent workers is likely to remain one of the most difficult issues under national implementation measures, because much will depend on how local law defines the relevant concept of “worker” and allocates responsibility between different entities. Agency workers are the clearest example. It may be unclear whether responsibility sits with the agency, the end user or both, and employers may not hold all of the data needed to answer information requests or assess reporting thresholds.
The same issues arise for other non-standard groups, including international assignees and individuals whose remuneration is shaped by allowances, mobility arrangements or other atypical benefits. Key questions include whether such workers count towards reporting thresholds, whether their pay data should be included in gap analysis, who is expected to provide the relevant information, and how potentially distorting remuneration elements should be treated.
Until local rules are clearer, many employers are likely to continue with a jurisdiction-specific approach rather than adopt a single EU-wide position on all atypical populations.
What should employers do now?
Although the implementation picture remains incomplete, the overall direction is clear. Employers with operations across the EU should continue preparing now rather than wait for every aspect of local implementation to be settled, while retaining enough flexibility to adapt as local rules develop. In practice, that means identifying representative structures, stress-testing job architecture and equal value methodology, reviewing data and systems readiness, auditing recruitment and onboarding practices, and considering how to treat non-standard worker populations.
Please contact your usual Baker McKenzie contact to discuss your compliance strategy.