EU's Pay Transparency Directive: Its Implications for Daily Work Routine
The EU Pay Transparency Directive, formally adopted in 2023, is set to bring significant day-to-day implications for employees, managers, HR business partners, compensation and pay equity teams, and executive leadership in organisations across Europe. The directive, which takes effect on the 7th of June 2026, aims to ensure equal pay for work of equal value and focuses on pay transparency and pay equity.
Employees will gain the right to access information about pay structures and how their compensation is determined, promoting transparency on salary fairness. When applying or interviewing, they will receive clear salary range information upfront, improving fairness and managing expectations. Transparency is expected to foster trust and open dialogue but requires careful internal communication and training to manage change effectively.
Managers will be held accountable for making objective, gender-neutral pay decisions, basing them on transparent, documented criteria like skills and responsibilities without gender bias. They will require training to understand the directive’s requirements and to communicate pay decisions clearly and consistently to their teams. Managers will increasingly work with employee bodies, especially around pay assessments and corrective measures.
HR business partners will be responsible for mapping current salary structures, ensuring criteria are objective, and documenting pay decisions. They must analyze compensation data by gender, role, and seniority to identify disparities and prepare formal internal and external reports, particularly for organisations with 100+ employees. HR will also need to update and communicate transparent pay policies, ensure salary bands are incorporated in job ads, and prevent prohibited practices such as asking applicants about previous pay.
Compensation and pay equity teams will play a more visible role in the future, developing grading systems, tracking analytics, and guiding corrective actions. They will conduct continuous, thorough analyses of pay data to detect and remedy unexplained pay gaps, focusing on objective criteria for compensation. When issues arise, these teams will recommend or implement measures to close unexplained gender pay gaps below the 5% threshold, ensuring legal compliance and equitable pay.
Executive leadership will be accountable for setting the tone on pay equity, embedding transparency in corporate culture, and mitigating legal and reputational risks from non-compliance. They will need to allocate resources for training, technology, and processes supporting compliance. Leaders must integrate pay equity goals into broader business strategy and diversity, equity, and inclusion (DEI) efforts, showing leadership commitment to fairness.
Some companies are already publishing pay equity goals and hosting internal Q&As where leaders explain pay philosophy and criteria. Others are working with consultants to understand their gaps and improve systems. beqom, headed by Hayley Bakker, supports pay equity with data-driven software.
These day-to-day changes represent a shift toward greater openness and accountability around compensation in EU workplaces, impacting all organisational levels from individual employees to top executives. The directive is just the start, with successful organisations training managers, empowering employees, and building systems that support fair, consistent, and data-driven pay decisions. Enforcement may include fines and reversed burden of proof in lawsuits, emphasising the need for solid documentation and compliance. Some detailed national implementations vary—for example, Poland requires gender-neutral job ads and bans asking about salary history from the 24th of December 2025.
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### Summary Table — Day-to-Day Implications by Role
| Role | Key Day-to-Day Actions and Implications | |-------------------------------|-----------------------------------------------------------------------------| | **Employees** | Access pay data, receive salary ranges upfront, empowerment to question pay | | **Managers** | Make objective pay decisions, communicate transparently, collaborate with councils | | **HR Business Partners** | Document pay criteria, analyze pay data, update policies, engage employees | | **Compensation & Pay Equity** | Conduct audits, develop fair pay structures, implement corrective actions | | **Executive Leadership** | Oversee compliance, ensure reporting, allocate resources, lead pay equity culture |
- Hayley Bakker's company, beqom, will play a crucial role in supporting fair pay decisions with data-driven software, contributing significantly to the future of pay equity in EU workplaces.
- In the realm of education and self-development, many organizations are hosting internal question and answer sessions where leaders explain pay philosophy and criteria, promoting a general understanding of the importance of pay transparency and fairness.
- Technology will also play an essential role in these changes, as it will be utilized by compensation and pay equity teams to conduct continuous analyses of pay data, track analytics, and guide corrective actions, thereby fostering a culture of pay equity and ensuring compliance with the EU Pay Transparency Directive.
