Equal pay for equal work or work of equal value between men and women – Rules on pay transparency

SUMMARY OF:

Directive (EU) 2023/970 on strengthening the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms

WHAT IS THE AIM OF THE DIRECTIVE?

It lays down minimum rules to reinforce:

respect for the principle of equal pay* for equal work or work of equal value between men and women;
the prohibition of any direct or indirect pay discrimination* on grounds of sex;
pay transparency and stronger enforcement of the right to equal pay.

KEY POINTS

The directive applies to:

public and private sector employers;
all workers with an employment contract or employment relationship defined by law, collective agreement and/or practice.

Equal pay for equal work or work of equal value

European Union (EU) Member States ensure that employers have pay structures that exclude any pay discrimination on grounds of sex.
The assessment of comparable work is to be based on criteria including skills, effort, responsibility and working conditions, and other criteria that are relevant to the specific job or position. Criteria must be applied in an objective gender-neutral manner, excluding any direct or indirect discrimination based on sex.

Pay transparency measures stipulate that:

job applicants:
- have the right to information from the prospective employer before an interview on the initial pay of the job position or its range and, where relevant, details of the provisions of the collective agreement applied by the employer in relation to the position;
workers:
- have the right to request (directly or through their workers’ representatives or national equality body) information on their individual pay level and the average pay levels, broken down by sex, for categories of workers performing the same work as them or work of equal value to theirs,
- will not be prevented from disclosing their pay for the purpose of the enforcement of the principle of equal pay;
employers:
- may not ask job applicants about their current or previous pay,
- ensure that vacancy notices and job titles are gender neutral and recruitment processes are non-discriminatory,
- make easily accessible to their workers the criteria that are used to determine workers’ pay, pay levels and pay progression, and those criteria shall be objective and gender neutral,
- inform all their employees annually of their right to request and receive in writing information on their individual pay and average pay levels broken down by sex for colleagues doing the same work or work of equal value,
- provide information such as the gender pay gap and the proportion of female and male staff receiving complementary or variable components (this requirement will be gradually introduced from 7 June 2027, for employers with more than 100 workers, depending on company size),
- cooperate with workers’ representatives to identify, remedy and prevent discriminatory pay differences when their pay reporting reveals a gender pay gap above 5% that cannot be justified by objective, gender-neutral criteria and was not tackled within 6 months.

Member States:

ensure the availability of analytical tools or methodologies to assess and compare the value of different jobs at the employer’s level;
provide technical assistance and training to help employers with fewer than 250 staff comply with the requirements of the directive;
take measures to ensure social partners are actively involved, without prejudice to the autonomy of the social partners and in accordance with national law and practice.

Remedies and enforcement

Member States must ensure that:

workers have the right to go to court to enforce their rights to equal pay if reconciliation fails;
associations, organisations, equality bodies, workers’ representatives and others with a legitimate interest in ensuring equality between men and women can be involved in administrative or legal proceedings;
workers whose rights have been infringed can claim full compensation, including back pay, related bonuses or payments in kind, compensation for lost opportunities and non-material damage;
competent authorities or national courts can order:
- that an infringement be stopped and the principle of equal pay be applied,
- employers to disclose any relevant evidence;
employers have to prove that no discrimination has taken place if a case is brought against them;
the limitation period for bringing equal pay claims is not shorter than 3 years;
penalties, which should include fines, are effective, proportionate and dissuasive;
in the performance of public contracts or concessions, economic operators (including the subcontracting chain) comply with the obligations relating to the principal of equal pay;
workers and their representatives are not victimised on the ground that they have exercised their rights relating to equal pay.

Horizontal provisions

Equality bodies have jurisdiction with regard to matters falling within the scope of the pay transparency directive.

Member States:

must provide their equality bodies with the adequate resources for effectively carrying out their functions with regard to the respect for the right to equal pay;
must ensure consistent and coordinated monitoring of, and support for, the implementation of the equal pay principle;
may apply more favourable terms to workers than those in the directive;
must provide Eurostat annually, from 31 January 2028, with national data for the calculation of the gender pay gap;
must inform the European Commission by 7 June 2031 on the implementation of the legislation – this provides the input for the Commission’s report to the European Parliament and the Council of the European Union by 7 June 2033.

FROM WHEN DO THE RULES APPLY?

The directive has to be transposed into national law by 7 June 2026. These rules should also apply from that date.

BACKGROUND

Women in the EU earn on average 13% less than their male counterparts. That gender pay gap has largely stagnated over the past decade.
The 2020–2025 EU gender equality strategy (see summary) provides the basis of the Commission’s work on gender equality and sets out the policy objectives, including pay transparency, and key initiatives during this period.
The principle of equal pay is enshrined in Article 157 of the Treaty on the Functioning of the European Union. This requires Member States to ensure ‘the principle of equal pay for male and female workers for equal work or work of equal value is applied’.
The prohibitions of discrimination on grounds of sex with regard to all aspects and conditions of remuneration is laid down in Article 4 of Directive 2006/54/EC (see summary).

KEY TERMS

Pay. Basic or minimum wage or salary, plus any benefits in cash or kind, a worker receives directly or indirectly.

Discrimination. This includes harassment and sexual harassment, less favourable treatment and instruction to discriminate against persons on grounds of sex, intersectional discrimination, and refers to direct and indirect discrimination.

MAIN DOCUMENT

Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023 to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms (OJ L 132, 17.5.2023, pp. 21–44).