New European Union Directive on Pay Transparency

On 10 May 2023, the European Union took a major step forward in tackling gender pay inequalities with the adoption of Directive (EU) 2023/970. France must transpose the Directive into national law by 7 June 2026. A draft bill is expected around September 2025, with adoption likely by end of the year.

The Directive introduces new obligations of employers, both during recruitment and throughout the course of the employment relationship, to promote greater pay transparency and more effectively prevent inequalities.

For instance, at the recruitment stage, it will no longer be permissible to state in job offers that « salary will depend on the candidate’s profile » and employers will no longer be allowed to ask candidates about their salary history (e.g., previous remuneration) or salary expectations.

Moreover, during employment, employees will be entitled to request information about (i) their individual pay level ; (ii) the average pay levels by gender, for categories of workers performing the same or equivalent work.

In addition, the current Gender Equality Index is being replaced by seven new, more detailed indicators. Where a pay gap exceeds 5% and cannot be objectively justified, the employer will be required to implement corrective measures within a reasonable timeframe, potentially in consultation with staff representatives, labour authorities or the equality body.

Member States must introduce effective, proportionate, and dissuasive sanctions. This Directive significantly reshapes the litigation landscape notably by extending the class action-type procedures, especially in pay discrimination cases.
Let’s be honest, it will probably give headaches to HR people !

In order to anticipate smoothly the future requirements, employers must anticipate now and begin preparations, notably by conducting an audit of the current pay policy to identify any unjustified gaps and assess financial impact.

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New European Union Directive on Pay Transparency