Pay Transparency Directive (EU) 2023/970: New obligations for employers

Although the prohibition of gender-based discrimination in employment has been part of European Union law for years, the gender pay gap remains a real issue. On average, it stands at around 13% across the EU, although in countries such a Luxemburg, Italy, and Belgium, it falls below 5%. Estonia records the highest level of the gap – over 21%. In response to the need for further legislative action, in May 2023 the EU adopted the Pay Transparency Directive 2023/970 on strengthening 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. The aim of this legislation is to establish effective measures to combat gender-based discrimination. Poland has until June 7, 2026, to implement these provisions.

Who is covered by Pay Transparency Directive (EU) 2023/970?

According to Article 2(2) of the directive, it provisions apply to all workers employed under an employment contract or in an employment relationship as defined by the law, collective agreements, or practices in force in the individual member states, considering the case law of the Court of Justice of the European Union. In line with Recital 18 of the directive and the established case law of the Court, the concept of a “worker” must be interpreted according to the autonomous definition under EU law, which may also include forms of employment that are not considered employment relationships under national law. However, the final determination of whether national employment relationships meet the EU definition of a worker lies with the national legislator as part of the implementation of the directive.

Pay equality starting from the recruitment stage

The new regulations will require significant changes to recruitment processes. Employers will be obliged to disclose the starting salary (or its range) in a way that ensures transparent negotiations – e.g., in the job posting or before the interview – and to ensure gender neutrality in the wording of job advertisements and job titles. Employers will also be required to ensure that the recruitment process is non-discriminatory, with the aim of guaranteeing equal pay for the same work or work of equal value. Asking candidates about their previous salary will also be prohibited.

If a collective agreement applies within the company, employers will also need to indicate the relevant provisions.

All of these measures aim to level the playing field for women and men in salary negotiations from the very start of the job application process.

The right to information on pay

Under the Pay Transparency Directive (EU) 2023/970, employers will be required to establish transparent remuneration systems. Employees will have the right – either individually or through trade union representatives – to request information from their employer regarding average pay levels, broken down by gender, for categories of employees performing the same work or work of equal value.

Moreover, employers will no longer be permitted to prohibit employees from disclosing their own remuneration. It is worth noting that existing legal provisions already protect employees who disclose their pay for the purpose of combating pay discrimination from any adverse consequences imposed by the employer.

Reporting obligations – a challenge for employers

A major challenge for employers will be collecting and processing salary data in a manner that meets the reporting obligations stipulated in the directive. Reports will need to be submitted to equality bodies and labor inspection authorities.

Employers will be required to report on:

• Gender pay gap;
• Gender pay gap in supplementary or variable pay components;
• Median gender pay gap;
• Median gender pay gap in supplementary or variable pay components;
• Percentage of female and male employees receiving supplementary or variable pay components;
• Percentage of female and male employees in each pay quartile;
• Gender pay gap among employees by category, based on standard hourly or monthly wages and supplementary or variable pay components.

When calculating these reporting indicators, it is essential to consider how these components are defined in Article 3 of Directive 2023/970.

Reporting deadlines

The reporting deadlines are outlined in the table below:

For employers with fewer than 100 employees, the EU legislator has left the introduction of reporting obligations to the discretion of member states. However, member states must allow such employers to submit reports voluntarily.

Legislative process in Poland

Poland has until June 7, 2026, to implement the directive, but as of now, official legislative work has not yet begun. Although a parliamentary bill amending the Polish Labor Code document 934) has been submitted to the Polish Parliament, its scope does not fully align with the EU requirements – it omits issues such as reporting obligations and the systematic evaluation of remuneration.

Accace Legal support

The implementation of the Pay Transparency Directive (EU) 2023/970 will require employers to adjust their HR documentation, processes, remuneration systems, and data reporting. Although the final form of national regulations regarding pay equality and transparency of working conditions is not yet known, it is advisable to start preparations now, as there may be little time left for implementation. For companies that have not previously pursued an active equality and pay transparency policy, meeting the new obligations may present a significant challenge.

Accace Legal offers comprehensive support in adapting organizations to these new requirements – ranging from an analysis of the compliance of current practices with upcoming regulations, through updating internal procedures, to implementing new organizational solutions and employee training. We encourage you to contact us for a detailed discussion on how these changes will impact your company and to plan implementation actions as early as possible.

Antoni Łukasiak

Junior Associate | Accace Poland

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Agnieszka Samborska

Legal Adviser and Partner | Accace Poland

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