The EU has recently published the 2023/970/EU Directive (the Directive) to strengthen the principle of equal pay for equal work between men and women through pay transparency and enforcement mechanisms.
The Directive aims to strengthen and enforce the principle of equal pay and the prohibition of workplace discrimination. While directives and legal framework within the EU and its Member States preventing discrimination in workplaces and promoting gender equality already exist, their effective implementation and enforcement has posed challenges. The Directive aims to create a better work environment for these principles to thrive and take effect, attracting significant attention from various interest groups regarding its objectives, rights, and obligations. Member States will have the obligation to transpose the Directive into national law by 7th June 2026.
New rights and obligations
The Directive seeks to achieve equal pay for equal work between male and female workers by imposing pay transparency obligations on employers and subjecting them to enforcement mechanisms.
Workers are granted the right to enforce equal pay for equal work. Employees now have the right to receive information about the initial pay or its range, and employers are prohibited from inquiring about an employee’s pay history from previous employments. In this respect, Member States shall put in place measures to prohibit contractual terms that restrict workers from disclosing information about their pay. In addition, workers or trade unions or other workers’ representatives and equality bodies shall have the right to request and receive in writing, information on their individual pay level and the average pay level, broken down by sex, for categories of workers performing the same work as them or work of equal value to theirs. Should there be any incorrect or incomplete information, workers or their representatives have the right to ask for additional and reasonable clarification.
Pursuant to the Directive, employers must ensure that the criteria used to determine their workers’ pay, pay levels, and pay progression are easily accessible to their workforce and are additionally obligated to report on the pay gap between male and female workers for the previous calendar year. The report should include information such as the gender pay gap and the gender pay gap in complementary or variable components, broken down by ordinary basic wages and complementary or variable components. The submission of the first report and its recurrence thereafter depends on the size of the organisation. In short:
- Employers with over 250 workers must provide the report by 7th June 2027 and annually thereafter.
- Employers with 150-249 workers must provide the report by 7th June 2027 and every 3 years thereafter.
- Employers with 100-149 workers must provide the report by 7th June 2031 and every 3 years thereafter.
- Employers with fewer than 100 workers can provide the report on a voluntary basis, with Member States having the discretion to make it a mandatory requirement.
The Directive further provides that should the aforementioned report of an organisation indicates an unjustified gender pay difference of at least 5% in any category of workers and the employer fails to remedy such an unjustified difference within six (6) months of the report’s submission, a joint pay assessment must be conducted, in order to identify, remedy and prevent such difference in pay which is not justified on the basis of the objective, gender-neutral, criteria.
Remedies and Enforcement Measures
The Directive includes various remedies and enforcement measures not only affecting employers in the event of non-compliance but also providing employees with means to enforce their rights.
Employees have the right to initiate court proceedings to enforce their rights and receive full compensation for any breaches. Remedies and enforcement measures outlined in the Directive include the right to full compensation, aiming to restore the worker to the position they would have been if he or she had not been discriminated. In this respect, Member Sates shall ensure that their competent authorities or national courts are able, where appropriate, to issue recurring penalty payment orders with a view to ensuring compliance. Such penalties must be effective, proportionate, and dissuasive, with the aim of guaranteeing a real deterrent effect.
For more information please visit our website microsite on Employment or send your queries at This email address is being protected from spambots. You need JavaScript enabled to view it..
Back to News
