EU Pay Transparency Directive

The EU Pay Transparency Directive requires EU Member States to adopt new pay transparency measures by 7 June 2026. 

While the Directive does not apply to UK employers because the UK is no longer part of the EU, some UK employers with international operations are opting for an integrated (if not identical) approach to pay transparency across each of the jurisdictions in which they operate. This is for a variety of reasons such as to ensure a fair and consistent approach, in anticipation of closer global convergence on this issue, to mitigate the risk of equal pay and discrimination claims and to address any gender pay gap.

There is no one size fits all, and approaches include: 

• Obtaining local advice across multiple EU jurisdictions in order to understand local law requirements, mapping those against existing practices and adopting a global pay transparency framework that is legally compliant across its operations. 
• Enhancing pay transparency procedures in the UK to align those with the Directive.
• Using the period before the Directive comes into force as an opportunity to audit and review recruitment and pay setting processes to identify exposure to risk.

Whatever approach employers adopt, CMS can work with you to map out a project plan and ensure compliance in the UK and across the EU.  
 

The PTD's requirements go beyond UK law on gender pay gap reporting and equal pay. Some of the key measures set out in the Directive are as follows:

• Establishing gender pay gap reporting regimes broken down by categories of workers covering pay and benefits. 
• Conducting joint pay assessments where pay gap reporting reveals a gender pay gap of at least 5% in any category of workers.
• Requiring employers to disclose pay information for job applicants including the pay level or pay range.
• Prohibiting employers from asking candidates about their current pay and pay history. 
• Limiting the extent to which employers can prevent workers discussing their pay (pay secrecy clauses). 
• Giving workers the right to information about pay. 

There are significant differences between the detailed measures in the PTD and the UK regime. For example, there is no scope within the UK to carry out a joint pay assessment and there is no right to request information about pay.

While the UK may see domestic pay transparency changes as a result of the UK Government Call for evidence on equality law exploring some aspects of pay transparency, these proposals are at a formative stage of policy development. The UK has been exploring different approaches to addressing pay gaps. From March to June 2025 the Government ran a consultation exploring mandatory ethnicity and disability pay gap reporting and the results of this exercise will inform the final rules around this new policy development. Employers can read more about the proposals in our Law-Now.

As a result of the current gap in legislation on this issue, employers in the UK have the benefit of flexibility in how they improve pay transparency. At CMS we can advise on the most appropriate approach at an organisational level.