NEWS     27.02.2026

Equal Pay for Equal Work in the European Union

On 10 May 2023, the European Union (EU) adopted Directive (EU) 2023/970 (Directive) with the objective of improving the practical application of the principle of equal pay for equal work or work of equal value between women and men. Although this principle already exists in EU law, the Directive reflects a significant change in regulatory approach: from formal equality to transparency and effective enforcement. 

The Directive responds to ongoing gender pay gaps across the EU and repeated observations by EU institutions that the existing legal tools have not delivered intended results. Lack of transparency around pay structures and the difficulty employees face in accessing comparative pay information were identified as key obstacles. Directive 2023/970 directly addresses these issues by introducing binding transparency obligations and procedural mechanisms designed to make equal pay rights easier to enforce.

Scope of application

The scope of the Directive is broad. It applies to both public and private sector employers and covers all workers who qualify as employees under national law, including those in non-standard forms of employment. Some provisions also apply to job applicants, which is a conscious move to address pay inequality issues already at the recruitment stage rather than only after employment relationship has been established.

Transparency

One of the main elements of the Directive is the introduction of transparency regarding remuneration before recruitment starts. Employers will be required to provide information on the initial remuneration or remuneration range for a position, based on objective and gender-neutral criteria. At the same time, employers will be prohibited from asking candidates about their current or previous remuneration. This represents a shift from practices still common in several Member States.

Transparency obligations will apply throughout the duration of employment relationship. Employees will have a right to obtain information on their own pay level as well as average pay levels for comparable work, divided by gender. Contractual clauses that prevent employees from disclosing pay information for the purpose of enforcing equal pay rights will be unenforceable. While data protection considerations remain relevant, the Directive clearly prioritises access to information as a tool for ensuring compliance.

In addition to individual rights, the Directive introduces periodic reporting obligations for larger employers. Depending on the number of employees, employers will be required to report on gender pay gaps, including both fixed and variable remuneration components. If significant pay differences are identified that cannot be objectively justified, employers may be required to carry out in a joint pay assessment with employee representatives and implement corrective measures. These mechanisms show that focus is on resolving internal issues through transparency, rather than relying mainly on court cases taken by individuals.

Enforcement Mechanisms and Employer Liability

Another characteristic element of the Directive is the way in which its provisions are enforced. In disputes concerning equal pay, the burden of proof may shift to the employer, especially where transparency obligations have not been fulfilled. Employees who experience pay discrimination are entitled to full compensation, including payment of outstanding remuneration and moral (alt. non-material) damage, without statutory caps. Member States are also obliged to provide for effective and dissuasive penalties for breaching Directive’s provisions.

The Directive must be transposed into national law by 7 June 2026. Although Member States maintain some flexibility in its implementation, the Directive sets minimum standards that are likely to result in significant legislative and practical changes in many jurisdictions. For employers with international operations, this presents complex compliance questions, especially in relation to harmonising remuneration structures across different countries while taking into account varying national transposition models.

Overall, the Directive represents a major step in EU employment law. By combining transparency, reporting, and stronger enforcement mechanisms, it changes how the principle of equal pay functions. Its impact is likely to extend far beyond gender equality, influencing the broader debate on remuneration mechanisms and other aspects relevant to European Union employees.

Grzegorz Kłodkowski