As the June 2026 implementation deadline approaches, EU member states are continuing to release draft legislation that shapes how the EU Pay Transparency Directive will apply in practice. Each month, we’ll share an update highlighting key developments and what they mean for employers.

The EU Gender Pay Transparency Directive requires all 27 EU countries to transpose pay transparency legislation into national law by June 2026, and introduces new obligations for employers operating in the region.

The Directive impacts all employers with employees in an EU country and introduces new requirements around pay transparency during recruitment, as well as pay disclosure obligations to current employees upon request. Employers with more than 100 employees in a single EU country will also be required to calculate and publish gender pay gap reports and take remedial action where pay gaps of over 5% are identified and cannot be justified using objective, non-gendered criteria.

The EU Pay Transparency Directive also takes a more holistic view on the definition of “pay,” adopting a broader definition of total rewards that encompasses both compensation and benefits.

Recent Updates

We’re finally seeing more traction from member states, with draft legislation now released by 11 of the 27 EU countries.

While there was early hope for consistency across the member states, we’re already seeing some clear differences in the application of the Directive. This will make navigating the legislation even more challenging for employers who have employees in multiple EU countries.

Poland and Germany

For example, Poland’s draft legislation significantly shortens response timelines for pay information requests, requiring employers to respond within 30 days to employee requests and within just 14 days to unions or employee representatives. This compares with the two month timeframe set out in the Directive.

Poland’s draft law may bring some relief to benefits teams. It indicates that employers may exclude pay components that are equal in cash, such as allowances and benefits in kind provided equally to all employees — potentially simplifying data collection and reporting. Germany may also be looking to simplify by allowing employers to exclude low-value benefits in kind, such as subsidized canteen meals or travel discounts, from reporting requirements.

Poland’s draft legislation would also bring forward the pay gap reporting timelines. Reports would be due by March 31 each year, with no phased introduction based on company size. All companies with more than 100 employees would be required to submit their first report by March 31, 2027, which is more than two months earlier than the Directive requires for employers with more than 150 employees, and more than four years earlier than for those with 100–149 employees.

Finland, Sweden, The Netherlands, Slovakia

Finland and Sweden plan to adopt the Directive’s headcount thresholds for pay gap reporting but will also retain elements of their existing laws. In Finland, companies with more than 30 employees must continue to complete pay audits, while Sweden’s threshold remains 25 employees.

The Netherlands, Slovakia, and Sweden look to be closely aligning their local laws with the Directive. However, the Netherlands is pushing to delay implementation of its legislation to January 1, 2027 — six months later than the Directive’s deadline. This could set a precedent for other countries to delay their implementation. If so, it will be interesting to see whether the European Commission will allow it or force countries to comply with the given deadline or face penalties.

Ireland and Malta

Some countries, including Ireland and Malta, are allowing greater flexibility around pay disclosure in the recruitment process. Employers may be permitted to provide information on salary levels/ranges only before the interview or start of employment, rather than in the job posting. This differs from countries that are aligning closely with the Directive, where disclosure of salary levels/ranges may be required in the job posting.

How Can You Prepare for the EU Pay Transparency Directive?

While we wait for draft legislation from the remaining 16 countries, and final legislation from all, employers should prepare now. We recommend focusing on the following four steps:

  1. Choose your data collection method: Decide how you will collect data across compensation and benefits.
  2. Assess your data: Review your total rewards and pay structures, benefits eligibility, and design, then calculate the pay gaps.
  3. Create an action plan: Document how pay gaps will be explained, where remediation will be required, and how findings will be communicated.
  4. Report your findings: Understand jurisdiction-specific legal requirements, build a compliant reporting process, implement supporting technology, and establish a framework for ongoing review.

Get Expert Support

If you need support for preparing for the EU Pay Transparency Directive requirements, reach out to a Sequoia Global Advisor.

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Elouise Rolo

Elouise Rolo

Elouise is a Global Consulting Director with Sequoia Global Services and is based in the UK. She has over 15 years of global benefits consulting experience and is a Fellow of the Institute and Faculty of Actuaries. Elouise has worked with clients at all stages of their journey from initial and rapid growth to fully global, having experience from working in both the US and Europe. She focuses on servicing multinational clients on global benefits management, strategic benefits design and development. Elouise is passionate about enhancing employee experience through the deployment of global employee benefits. Legislation like the EU Pay Transparency Directive puts gender pay discrimination in the spotlight and Elouise is excited to be a part of a movement towards real progress in this area.