[EMEA] EU pay transparency directive brings ‘equal pay for equal work or work of equal value’

The European Union’s (EU) pay transparency directive (Directive (EU) 2023/970) introduced the principle of “equal pay for equal work or work of equal value” and was intended to eliminate pay discrimination under the obligation that job roles of equal worth receive equal pay, regardless of gender. Ogletree Deakins breaks down the Directive and its implications for employers.

Pay transparency has been identified as a key obstacle to closing the gender pay gap in the EU. Directive (EU) 2023/970 aims to close the gender pay gap and promote fair pay practices by increasing transparency and accountability between employers and employees.

The principle of “equal value” will reportedly require employers to undertake an evaluation exercise, determining where equivalence of the respective value of roles may exist across their organisations. According to Ogletree Deakins, employers should think about preparing for its impact now.

The deadline for EU member states to transpose the directive into national law is June 7, 2026. Each member state has the autonomy to transpose the directive in its own way, as long as the directive’s minimum requirements are met.

Ogletree Deakins suggests that employers consider the objective criteria used to determine how categories of employees are decided, and which roles are of equal value. All employers must reportedly ensure that they are consistent and nondiscriminatory in their application of pay criteria and be prepared to demonstrate how this operates in practice. To maintain transparency and fairness, detailed records of salary structures and clear strategies to address possible pay disparities are required.

The directive will call for greater accountability from employers to ensure fair pay practices. To maintain compliance, employers may need to establish job evaluation systems, transparent pay structures, and data reporting. The concept of “equal value” is a complicated one, making this a good time to begin to prepare.

Source: Ogletree Deakins

The European Union’s (EU) pay transparency directive (Directive (EU) 2023/970) introduced the principle of “equal pay for equal work or work of equal value” and was intended to eliminate pay discrimination under the obligation that job roles of equal worth receive equal pay, regardless of gender. Ogletree Deakins breaks down the Directive and its implications for employers.

Pay transparency has been identified as a key obstacle to closing the gender pay gap in the EU. Directive (EU) 2023/970 aims to close the gender pay gap and promote fair pay practices by increasing transparency and accountability between employers and employees.

The principle of “equal value” will reportedly require employers to undertake an evaluation exercise, determining where equivalence of the respective value of roles may exist across their organisations. According to Ogletree Deakins, employers should think about preparing for its impact now.

The deadline for EU member states to transpose the directive into national law is June 7, 2026. Each member state has the autonomy to transpose the directive in its own way, as long as the directive’s minimum requirements are met.

Ogletree Deakins suggests that employers consider the objective criteria used to determine how categories of employees are decided, and which roles are of equal value. All employers must reportedly ensure that they are consistent and nondiscriminatory in their application of pay criteria and be prepared to demonstrate how this operates in practice. To maintain transparency and fairness, detailed records of salary structures and clear strategies to address possible pay disparities are required.

The directive will call for greater accountability from employers to ensure fair pay practices. To maintain compliance, employers may need to establish job evaluation systems, transparent pay structures, and data reporting. The concept of “equal value” is a complicated one, making this a good time to begin to prepare.

Source: Ogletree Deakins