EU Pay Transparency Directive

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A global priority

The EU Pay Transparency Directive is set to be implemented by EU Member States by 7 June 2026. The Directive aims to strengthen the principle of equal pay for equal work through new and enhanced pay transparency and enforcement mechanisms across the EU.

Some of the key measures set out in the Directive are as follows.  

• Establishing gender pay gap reporting regimes 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.

Mandatory steps

Compliance will involve a range of new processes including collecting data, job evaluation, and assessing work of equal value. This will also include putting in place new (or improved) systems to analyse and report on gender pay gaps, understanding what constitutes pay, considering whether any gaps identified can be justified by objective and gender-neutral factors, and carrying out a joint pay assessment where required. Employers will also need to review its job offers to ensure they are neutral, provide internal training related to pay transparency and equal pay, as well as be ready to respond to information requests about pay.

Although the Directive only applies in the EU, many multinational employers including those operating in the UK and across EU Member States may consider adopting a unified approach to pay transparency across their operations which will involve careful preparation and planning. Click here to find out more about the impact of the Directive in the UK.

As with any Directive, each country may implement the rules differently, so it is essential to be aware of how local laws might vary. To keep up to date with implementation timescales and local regimes, please see CMS’ FAQ on the EU Pay Transparency Directive and the UK’s gender pay gap reporting regime.

Why it matters to employers

• Compliance risk. Implementation of the Directive will differ by country, but the trend is clear – more transparency and accountability, and stricter enforcement.
• Talent and reputation. Fair and transparent pay practices are critical for attracting and retaining diverse talent, as well as to avoid reputational damages
• Operational readiness. Global employers will need to respond to implementation of the Directive by EU Member States, and consider whether to harmonise relevant policies across multiple jurisdictions while respecting local rules.

How CMS can help

• Cross-border compliance strategy. CMS can help employers to map obligations and penalties across all jurisdictions in which they operate.
• Policy and process alignment. CMS’ international network of employment and labour law experts can advise on the creation of global frameworks that comply with local laws.
• Data and analytics. CMS can advise on the implementation of systems (or systems improvements) for pay gap analysis and pay gap reporting at scale.
• Remediation: CMS can help identify pay disparities, its justifications, and, where this is not possible, outline a plan to eliminate/mitigate them.
• Training and change management. CMS can equip HR and leadership teams with the knowledge they need to ensure these changes are understood, delivered effectively and in line with best practice worldwide.
• Litigation and risk management. CMS can provide support in handling disputes and mitigating exposure arising from the Directive.

Gender Pay Gap Questionnaire

Contact us

For tailored advice on preparing for the EU Pay Transparency Directive or to discuss your organisation’s compliance strategy, please contact your usual CMS advisor or one of our employment law specialists at employment@cmslegal.com.