EU Pay Transparency: Commission FAQs clarify key points for employers

The European Commission has published last month a new FAQs on the EU Pay Transparency Directive. They provide practical guidance on several issues employers are currently working through.

The FAQs are not legally binding and do not replace national implementation laws. However, they give useful indication of the Commission’s approach.

What do employers need to know?

1. Most pay elements must be included

Employers should generally include all pay elements received during the reporting period, including:

• basic salary;

• bonuses and variable pay;

• benefits in cash or in kind; and

• employer contributions to occupational pension schemes.

Benefits in kind may need to be given a monetary value.

The FAQs suggest that certain benefits may not need to be included if they are provided to all employees without conditions or exceptions. Examples include laptops, lunch vouchers or collective training. The same may apply to voluntary benefits that are available to everyone, such as gym memberships.

Employers should document which pay elements they include or exclude and why.

2. Different jobs may belong to the same worker category

A category of workers is not limited to employees doing exactly the same job. It may include different roles if the work is considered to be of equal value.

Employers must assess job value using at least four gender-neutral criteria:

• skills;
• effort;
• responsibility; and
• working conditions.

Other criteria can be used, but they must be relevant, objective and free from gender bias. Employers should also be able to explain how each criterion is weighted.

Market conditions may affect an employee’s pay, but the Commission warns that they do not necessarily reflect the value of the job itself.

3. Pay transparency must comply with the GDPR

The Directive does not require employers to disclose another employee’s individual pay. Comparisons are based on average pay levels within a category of workers.

However, averages may reveal personal information where a category contains only a small number of employees. Depending on national law, access to this information may need to be limited to workers’ representatives, labour inspectorates or equality bodies.

Employers should identify small categories and put appropriate data protection measures in place.

4. The rules are not limited to large employers

Pay gap reporting under the Directive applies to employers with at least 100 workers. The first reporting deadline is 7 June 2027 for employers with at least 150 workers.

However, other requirements apply regardless of employer size. These include:

• providing applicants with the initial pay or pay range;
• not asking applicants about their pay history;
• responding to employees’ pay information requests; and
• maintaining objective and gender-neutral pay structures.

Collective agreements do not remove these obligations. Genuine self-employed contractors are generally outside the scope, but individuals who are effectively workers may be covered.

5. Where do Member States stand? 

Only 5 Member States have adopted full implementing legislation: Greece, Italy, Lithuania, Malta and Slovakia. The new requirements already apply in Italy, Malta and Slovakia, while Lithuania is introducing some requirements gradually until January 2027 and the main Greek rules will apply from 1 November 2026. 

Four other countries have implemented limited parts of the Directive: Estonia and Poland have introduced recruitment transparency requirements, Czechia has banned pay secrecy clauses, and Belgium has adopted rules covering only parts of the public sector. 

The remaining 18 Member States have not yet completed implementation but further developments are expected in other countries. The Dutch bill is before Parliament and is intended to take effect on 1 January 2027, while France is expected to present its implementing legislation to Parliament in autumn 2026. Germany remains at an early preparatory stage, with no implementation date confirmed. 

What should employers do now?

Employers should:

1. map all salary, bonus, benefit and pension data;
2. decide how benefits in kind will be valued;
3. document any pay elements they intend to exclude;
4. review their job categories and evaluation criteria;
5. identify categories that may create data protection risks; and
6. check the national rules in each country where they operate.

For more insights on gender-neutral job evaluation, valuing benefits for pay transparency reporting, gap analysis and remediation, or your multi-country transposition roadmap, please reach out to your regular PwC contact, Bart Van den Bussche, Pierre Demoulin, Sandra De Weerd or Nicolas Ryckaert.