From June 2026, pay secrecy will be a thing of the past. The new EU Pay Transparency Directive is ushering in a new era of openness, where fair pay, career clarity and accountability will change the way we work.
Businesses that don’t prepare for these changes risk more than just fines. Not complying could lead to legal disputes, harm your reputation and lose trust with both employees and potential candidates. That’s why it’s vital to make sure you are ready, so you can attract and retain the best people.
At ADP, we believe people do their best work when they know where they stand. We’ve put together a handy guide that covers all the key changes — from transparent salary ranges to mandatory pay gap reporting, so you can clearly understand your new responsibilities as an employer. We’re helping make pay clear for everyone, so you can build a fairer, more open workplace.
Did you know…
30% of workers in Europe say their pay is not fair for the work they do.
What you’ll discover:
What’s changing for you?
From disclosing salary ranges to mandatory pay gap reporting, discover how greater transparency can enhance trust, attract top talent and foster a more inclusive company culture.
Step-by-step compliance roadmap
An easy-to-follow roadmap that guides you through every stage of compliance, from auditing your current pay practices to updating HR policies, communicating with employees and submitting reports — all to ensure you avoid costly mistakes.
Useful hints and tips
Helpful advice on writing open job ads, defining pay and promotion criteria and reinforcing fairness at every stage of the employee journey, from recruitment to promotion.
Making sense of gender pay
Straightforward guidance on the new reporting rules and what they mean for your business, as well as how to identify gaps and address underlying causes.
Did you know…
34% of women in Europe say their salary is not fair for the work they do, compared to just 25% of men1
More than just compliance
See how putting transparency at the heart of your business can help you attract top talent, build trust and create a culture where people want to stay and thrive.
Did you know…
In 15 of the 34 markets we surveyed, more than 30% of women said they are paid unfairly. Men reached the 30% threshold in only five markets
How ADP supports your pay transparency obligations
We’re here to give you clarity, control, and confidence as you prepare for the new Pay Transparency Directive.
ADP offers three ways to support your compliance:
- Easy-to-use payroll reports
Quickly access the salary data you need and combine these reports with your internal HR data to meet your needs.
- Secure self-service data access
Get instant, secure access to your payroll data through APIs. Build your own solutions or connect with third-party platforms. (Available for ADP Global Payroll clients by June 2026.)
- Support from trusted partners
Work with expert partners through the ADP Marketplace who can help you automate and streamline data gathering from ADP systems.
To find out more how we can support you,speak to one of our advisers
FAQ
1. What is the EU Pay Transparency Directive?
The EU Pay Transparency Directive is a new piece of legislation designed to combat the gender pay gap by increasing transparency around pay within companies operating in the European Union. Its goal is to empower workers to exercise their right to equal pay for equal work or work of equal value and to provide employers with tools to address pay discrimination.
2. When does the Directive come into effect?
While the Directive entered into force on 6 June 2023, EU Member States have until 7 June 2026 to transpose its provisions into their national laws. The actual implementation dates for various requirements may vary slightly depending on national legislation.
3. Who does the Directive apply to?
It applies to all employers, both private and public, within the European Union. The specific reporting requirements may vary based on company size (e.g., companies with 100 or more employees have more extensive obligations).
4. What are the key obligations for employers under the Directive?
Key obligations include:
- Pay transparency before employment — job applicants must receive information about the initial pay range or level for the position
- No salary history questions — employers cannot ask job applicants about their past salary history
- Right to information for employees — employees have the right to request and receive information on their individual pay level and the average pay levels, broken down by sex, for categories of workers performing the same work or work of equal value
- Gender pay gap reporting — employers with 100 or more employees must regularly report on their gender pay gap
- Joint pay assessment — if reporting reveals a gender pay gap of at least 5% that cannot be justified by objective, gender-neutral factors, employers must conduct a joint pay assessment in cooperation with workers' representatives
5. What are the reporting requirements for companies?
- For companies with at least 100 employees — they must report on their gender pay gap
- Companies with 150+ employees — report annually
- Companies with 100-149 employees — report every three years
This reporting includes information on the gender pay gap, the gender pay gap in complementary or variable components, the median gender pay gap, and the proportion of female and male workers receiving complementary or variable components.
6. What are the consequences for non-compliance?
Member States must establish effective, proportionate, and dissuasive penalties for infringements. These can include fines, compensation for victims of discrimination, and potential invalidation of discriminatory pay clauses. Victims of pay discrimination also have the right to claim full compensation for damages suffered, including full recovery of back pay and related bonuses.
7. How does the Directive empower employees?
- It empowers employees by:
- Giving them the right to access clear information about pay scales and gender pay gaps
- Making it easier to identify potential pay discrimination
- Shifting the burden of proof to the employer in pay discrimination cases once an employee establishes a prima facie case
- Ensuring access to legal remedies and compensation
8. What is the "burden of proof" shift?
If an employee can demonstrate a ‘prima facie’ (at first sight) case of pay discrimination, the burden of proof shifts to the employer. This means the employer must then prove that no discrimination took place and that any pay differences are based on objective, gender-neutral factors.
9. What about ‘equal pay for equal work or work of equal value’?
The Directive reinforces this principle, which is a cornerstone of EU law. It requires employers to use objective and gender-neutral criteria for job evaluation and classification systems to ensure that jobs of equal value are paid equally, regardless of the gender of the person performing them.
10. What steps should employers take to prepare for the Directive?
Employers should:
- Conduct a pay equity audit to identify and address any existing gender pay gaps
- Review and update job descriptions, evaluation systems, and pay structures to ensure they are gender-neutral and transparent
- Develop clear policies and procedures for pay transparency and information requests
- Train HR and management on the new requirements
- Prepare for regular gender pay gap reporting, if applicable to their company size
- Engage with workers' representatives where required
1 ADP Research, People at Work 2025: A Global Workforce View
2 ADP Research Institute, People at Work 2022: A Global Workforce View
3 ADP, The potential of payroll in 2024: Global payroll survey
