EU Pay Transparency Directive: Impacts on employers and employees by 2026

By June 2026, EU member states must implement the new European Union (EU) Pay Transparency Directive into national law. It aims to reduce the pay gap between men and women, partly caused by direct or indirect gender discrimination. The new directive includes measures ranging from banning potential employees from asking about their current salary to allowing employees to speak up about their pay. The Ecovis experts explain the details.

A lack of transparency on organisational pay levels can lead to a situation where gender discrimination and gender bias can go undetected or be difficult to prove. The new directive therefore aims to introduce mandatory measures to encourage organisations to review their pay structures. The aim is to ensure that women and men who do the same work or work of equal value receive equal pay. It is also intended to enable victims of discrimination to assert their right to equal pay.

However, the application of the principle of equal pay does not mean that employers cannot pay different wages to employees who perform the same work or work of equal value, provided that objective, gender-neutral and impartial criteria, such as performance, are used, explain the Ecovis experts.

Operate a transparent remuneration strategy. We will support you in this.

Loreta Andziulytė, partner and attorney at law, ECOVIS ProventusLaw, Vilnius, Lithuania

Companies must introduce a transparent remuneration strategy

The biggest challenge for many organisations is to create a transparent and systematised pay policy and an appropriate position grading. One of the most essential transparency measures under the directive is the obligation for employers to report on the pay gap between female and male workers. All employees will have the right to receive information on their salary and average salary levels, and employers must provide this information within a specified timeframe. Employers with 100 or more employees must make such reports regularly. However, the directive also foresees that this obligation will be phased in gradually.

For further information please contact:

Loreta Andziulytė, partner and attorney at law, ECOVIS ProventusLaw, Vilnius, Lithuania
Email: loreta.andziulyte@ecovis.lt