Pay transparency: What is anticipated in the proposal to transpose Directive (EU) 2023/970?
Meet The Law - Employment, Labour & Pensions
KEY MESSAGE: The Government has published a draft law that aims to transpose Directive (EU) 2023/970 on pay transparency. This is only a proposal currently open for public consultation — nothing changes, at this stage, in terms of companies’ obligations.
1. Context
Directive (EU) 2023/970 of 10 May 2023 lays down minimum requirements for pay transparency to strengthen the principle of equal pay for men and women. Member States were required to transpose it by 7 June 2026. In Portugal, the current regime is based on Articles 23 to 31 and 270 of the Labour Code and on Law No. 60/2018. The draft now published (BTE Supplement No. 26, dated 5 August 2026) goes, in certain respects, beyond the European minimum. The proposal is currently open for public consultation (20 days from publication) and the future law would only come into force on the first day of the month following its publication in the Official Gazette.
2. Main changes in the proposal
2.1. Rights to information
- Candidates: initial remuneration or salary range and applicable CBA to be disclosed before the contract is signed; a ban on asking about salary history.
- Employees: annual request for individual pay levels and averages by gender within the comparable group; response within 2 months (via representatives or CITE).
- Clauses preventing the disclosure of one’s own pay are void;
- Pay standards, levels and progression criteria must be accessible to all (displayed on notice boards/intranet).
2.2. Reporting obligations
Mandatory reporting for employers with 50 or more employees (Directive: 100) — average/median pay gap, variable components, quartiles, by group:
- ≥ 250: annually, from 7 June 2027;
- 150–249: every three years, from 7 June 2027;
- 50–149: every three years, from 7 June 2031.
Temporary workers are also included. Information must be accessible to workers and their representatives, who may request clarification.
2.3. Enforcement and sanctions
- The ACT may require justification or rectification within 90 days; an unjustified discrepancy is presumed to be discriminatory.
- An unjustified gap of ≥ 5 per cent triggers a joint assessment (45 days), corrective measures (90 days) and an implementation report.
- Offences ranging from minor to very serious; in the event of a repeat offence: loss of public incentives, exclusion from tenders for up to 2 years, compulsory training.
- Protection against retaliation extended to 3 years; full compensation and possible exemption from court costs.
2.4. Other aspects
- A formal remuneration policy based on objective criteria, to be agreed with workers’ representatives.
- Strengthening the role of CITE; publication of reporting data by employer, whilst ensuring data protection.
3. Current situation vs. proposal
| Topic | Current situation | Proposal |
| Information for candidates | No specific obligation | Remuneration and working hours to be disclosed before the contract is signed; a ban on asking about employment history |
| Information for employees | General law; social report | Annual request for data on levels and averages by gender; response within two months |
| Report | Social report; biennial gap analysis (Law 60/2018) | Detailed report on gaps, quartiles and components; threshold ≥ 50 |
| Remuneration policy | Principle of equality; objective assessment (Article 31 of the Labour Code) | A formal policy with objective criteria and the involvement of representatives |
| Sanctions | Serious/very serious administrative offences | Extended framework + ancillary penalties (loss of incentives, exclusion from tenders) |
| Protection against retaliation | Nullity of an unfair disciplinary measure (Article 331 of the Labour Code) | Extended cover to 3 years; automatic full repair |
4. Next Steps
The proposal is currently open for public consultation (20 days from 5 August 2026). Following this period, the Government may revise the proposal before submitting it to Parliament. Until it is approved and published, the current regime remains in full force and none of the proposed measures are binding. Should you wish to contribute to the final shape of the legal framework, we are available to assist.
Document available for consultation here.
Our Gender Pay Gap team is available to answer any questions and provide support in preparing for the new legal framework.
