Pay Transparency Directive

The EU Pay Transparency Directive strengthens the application of equal pay for equal work between women and men through transparency measures. It is part of the social and governance dimension of ESG, addressing the gender pay gap.

Key measures include pay transparency for job applicants (such as information on starting pay before an interview and a ban on asking candidates about their pay history), the right of workers to information about pay levels broken down by sex for categories of workers doing the same work or work of equal value, and gender pay gap reporting obligations for employers, phased in by size. Where a reporting gap above a set threshold is unexplained, a joint pay assessment may be required.

As a directive, it must be transposed into national law by member states, and the detailed obligations a given employer faces depend on that national implementation.

The directive increases demand for skills in pay equity analysis, reward and compensation, and diversity, equity, and inclusion reporting.