EU Pay Transparency: what UK and international employers need to prepare for

EU Member States were required to transpose Directive (EU) 2023/970 into national law by 7 June 2026. Implementation therefore depends on the legislation adopted in each country. Organisations should take local legal advice, but the reward and workforce preparation required is broader than legal compliance alone.

Does the Directive apply to UK employers?

The Directive does not directly create obligations for employees working solely under UK law. However, UK-headquartered groups may be affected through subsidiaries, branches or employees in EU Member States. International employers may also want a consistent global approach where separate country practices would be difficult to govern or explain.

The direction of travel matters even where the Directive does not apply directly. Employees, candidates, investors and regulators increasingly expect clearer pay ranges, objective progression criteria and evidence that pay differences are fair.

Key requirements in the Directive

The precise implementation varies by country, but the Directive establishes several important principles.

Pay information before employment

Applicants must receive information about the initial pay or pay range for a role, based on objective and gender-neutral criteria. Employers must not ask candidates about pay history, and job titles and recruitment processes should be gender-neutral.

Transparency of pay setting and progression

Workers must be able to access the criteria used to determine pay, pay levels and pay progression. This increases the importance of clear salary structures, career levels and manager guidance.

Employee rights to information

Workers have rights to request information about their own pay level and average pay levels, broken down by sex, for categories of workers performing equal work or work of equal value. Employers must inform workers annually of this right and respond within the required period.

Pay-gap reporting

Reporting requirements include the gender pay gap, variable-pay gaps, median gaps, benefit participation and differences by categories of workers. The timetable varies by workforce size, beginning with larger employers.

Joint pay assessment

Where reporting identifies a gender pay gap of at least 5% in a category of workers, the difference cannot be justified using objective gender-neutral factors and it has not been remedied within the required period, a joint pay assessment may be required.

Why job architecture becomes critical

Many requirements depend on identifying categories of workers doing equal work or work of equal value. Job titles alone are not reliable. Organisations need a defensible method for grouping and comparing roles using objective criteria such as skills, effort, responsibility and working conditions.

A coherent job architecture can connect job families, career levels, grade structures and pay ranges. It also provides the foundation for consistent recruitment ranges, progression criteria and employee information.

Six practical preparation priorities

1. Map legal entities and workforces

Identify which entities, employees and reporting populations fall within each national regime. Do not assume that one group-wide answer will automatically meet every local requirement.

2. Test job and worker categories

Review how roles are grouped, levelled and evaluated. Check whether categories are meaningful, gender-neutral and supported by reliable data.

3. Review pay structures and ranges

Assess whether salary ranges are current, whether employees are positioned consistently and whether starting salaries and progression decisions can be explained using objective criteria.

4. Conduct a pay-equity diagnostic

Analyse base pay and variable reward using relevant personal and job variables. Investigate material differences rather than relying only on headline averages. Document legitimate explanations and identify areas requiring remediation.

5. Strengthen governance and documentation

Clarify decision rights for offers, promotions, pay reviews and exceptions. Record the reasons for decisions and ensure managers have practical guidance.

6. Prepare communication and employee processes

Decide how employees will request information, who will respond, how data will be protected and how managers will explain ranges and progression. Transparency without preparation can create confusion rather than trust.

What is happening in the UK?

UK employers with 250 or more employees remain subject to gender pay-gap reporting. In 2026, government guidance also introduced voluntary gender pay-gap and menopause action plans, with mandatory action plans expected from spring 2027 subject to legislation.

UK organisations should therefore avoid treating EU and UK developments as unrelated exercises. Both increase the need for reliable workforce data, clear job structures, credible analysis and practical action plans.

Common preparation mistakes

Common mistakes include focusing only on the reporting calculation, assuming HR-system job codes are a defensible job architecture, publishing ranges before reviewing employee positioning and waiting for every national detail before improving weak data or governance.

Another risk is treating transparency as a communication project. Communication is important, but it cannot compensate for inconsistent pay decisions or unexplained inequalities.

Frequently asked questions

Must every salary be published?

The Directive requires applicants to receive the initial pay or range for a role, but the exact method and detail depend on national implementation. Employers should confirm local requirements.

Does a gender pay gap prove unequal pay?

No. A gender pay gap is an aggregate measure. Equal-pay analysis examines whether people performing equal work or work of equal value receive equal reward unless a difference can be objectively justified.

Can global grades be used as worker categories?

Not automatically. Grades may be too broad or group dissimilar work. Categories should reflect the applicable legal test and be supported by objective job information.

When should preparation begin?

Immediately where data, job architecture or governance is weak. These foundations take time to improve and are difficult to repair during a reporting deadline.

Prepare for transparency with confidence

Reward Associates supports pay-equity reviews, pay-transparency readiness, job architecture, salary structures and implementation planning for UK and international organisations.

Book a free 30-minute Reward Consultation to discuss a Pay Equity and Transparency Readiness Review.

About the author

Jean-Baptiste Jugand is the founder of Reward Associates and advises organisations on pay equity, pay transparency, job architecture, reward governance and international reward.

Important note and references

This article provides general information rather than legal advice. Employers should confirm the legislation and guidance applying in each relevant country.

• Directive (EU) 2023/970, Official Journal of the European Union.
• UK Government guidance on gender pay-gap reporting and equality action plans, 2026.