What is the Pay Transparency Directive?
The Pay Transparency Directive is the common name for Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023. Its purpose is to strengthen the application of the principle of equal pay for equal work or work of equal value through pay transparency and enforcement mechanisms. The Directive is an EU legal act that had to be implemented by Member States, including Poland, into national law.
The Directive does not create a general obligation to make every employee’s salary public. It introduces structured rights and duties aimed at allowing workers, job applicants, employers, courts and public authorities to identify and address unjustified pay differences between women and men. In practice, it affects recruitment, remuneration policies, access to pay information, reporting obligations and internal HR compliance.
Member States were required to transpose the Directive into national law by 7 June 2026, according to Article 34 of Directive (EU) 2023/970. This means that Polish employers should verify the status of Polish implementing legislation and align their internal practices with the applicable national rules.
What does the Pay Transparency Directive regulate?
The Directive regulates several areas of employment law and HR governance. One of its key elements is pay transparency before employment. Employers are required to provide job applicants with information about the initial pay or pay range for a given position. This information should be made available in a way that allows informed and transparent salary negotiations. Under Article 5 of Directive (EU) 2023/970, employers must also refrain from asking applicants about their pay history in current or previous employment relationships.
The Directive also gives workers the right to request information about their individual pay level and average pay levels, broken down by sex, for categories of workers performing the same work or work of equal value. This is intended to make it easier to verify whether pay practices are objective and non-discriminatory. Employers must inform workers annually about this right and the steps required to exercise it, as provided in Article 7 of the Directive.
Another important obligation concerns pay structures. Employers must ensure that remuneration systems are based on objective, gender-neutral criteria. These criteria may include skills, effort, responsibility and working conditions, provided they are relevant to the job and applied consistently. The Directive is therefore relevant not only to base salary, but also to bonuses, benefits, allowances and other components of remuneration.
The Directive introduces pay reporting duties for larger employers. Under Article 9 of Directive (EU) 2023/970, employers with 250 or more workers must report pay gap information by 7 June 2027 and then annually. Employers with 150 to 249 workers must report by 7 June 2027 and then every three years. Employers with 100 to 149 workers must report by 7 June 2031 and then every three years. Employers with fewer than 100 workers are not covered by the EU reporting obligation, although Member States may introduce stricter national rules.
If pay reporting reveals a difference in the average pay level between women and men of at least 5% in any category of workers, and the employer cannot justify that difference on objective gender-neutral grounds and does not remedy it within six months, a joint pay assessment may be required. This mechanism is regulated in Article 10 of Directive (EU) 2023/970.
When is the Pay Transparency Directive relevant?
The Pay Transparency Directive is relevant whenever an organisation recruits employees, designs remuneration systems, conducts salary reviews, prepares HR documentation or manages disputes concerning equal pay. It is particularly important for employers operating in several EU countries, employers with complex bonus systems, employers using broad job families or grading structures, and employers with a significant number of employees in comparable roles.
For employees and job applicants, the Directive strengthens access to information. A candidate should be able to understand the expected pay level before accepting or negotiating an offer. A worker should be able to obtain information allowing assessment of whether the remuneration received is consistent with the principle of equal pay for equal work or work of equal value.
For employers, the Directive creates a need to review salary policies before any formal claim arises. A pay gap is not automatically unlawful if it results from objective and gender-neutral factors. However, the employer should be able to explain and document those factors. Lack of documentation, inconsistent criteria or informal salary decisions may increase the risk of disputes, inspections and claims.
The Directive also affects litigation. It strengthens enforcement mechanisms, including rules on compensation, access to evidence and the burden of proof. Under Article 21 of Directive (EU) 2023/970, limitation periods for bringing equal pay claims must not be shorter than three years. Under Article 18, where an employer has not complied with relevant pay transparency obligations, the burden of proof will generally shift to the employer in proceedings concerning alleged pay discrimination.
Why early legal review matters
A prompt consultation concerning pay transparency can help identify risks before they become formal disputes. Employers may need to verify job classification, pay bands, bonus criteria, recruitment templates, employment contracts, internal regulations and reporting processes. Early review may reduce the risk of inconsistent pay decisions, discrimination claims, reputational exposure, administrative obligations being missed and financial liability.
For businesses in Poland, the key challenge will be to align internal practices with both the EU Directive and the Polish implementing legislation. Some details may depend on national rules, including procedural requirements, competent authorities, sanctions and the practical format of reporting. The Directive remains a key reference point for preparation and compliance.
Legal support in relation to the Pay Transparency Directive
Legal support in the area of pay transparency may include in particular:
- review of remuneration policies, pay bands and bonus schemes,
- assessment of job categories and criteria for work of equal value,
- preparation of recruitment documentation compliant with pay transparency rules,
- review of employment contracts, workplace regulations and internal HR procedures,
- support in preparing for pay gap reporting and joint pay assessments,
- legal assessment of pay discrimination risks,
- representation in employment disputes concerning equal pay,
- monitoring of Polish legislation implementing Directive (EU) 2023/970.
Need assistance with the Pay Transparency Directive? Contact us.
See also
- Employment Contract
- Dismissal
- Corporate secretary
- Financial reporting