The EU Pay Transparency Directive, in plain terms

Who is covered (Art. 2)

The directive applies to all employers in the public and private sectors, whatever their size, and to every worker with an employment contract or employment relationship as defined by national law, collective agreements or practice. Job applicants are covered by the recruitment rules in Article 5.

What counts as pay (Art. 3)

Pay is the basic wage or salary plus any other consideration, in cash or in kind, that a worker receives directly or indirectly from the employer in respect of the job: complementary or variable components such as bonuses, overtime, allowances and benefits in kind. The pay level is gross annual pay and the corresponding gross hourly pay.

Work of equal value (Art. 4)

Employers must have pay structures that ensure equal pay for equal work or work of equal value. Jobs are compared on objective, gender-neutral criteria, agreed with workers' representatives where they exist, which include skills, effort, responsibility and working conditions. Relevant soft skills must not be undervalued.

Before employment

Employers must inform applicants of the starting pay or its range before the interview, and may not ask candidates about their pay history. Job titles and criteria must be gender-neutral.

How pay is set and how it progresses (Art. 6)

Employers must make easily accessible the objective, gender-neutral criteria used to set pay and to determine pay progression. Workers are entitled to know the basis on which their pay is decided and advances. Parmetra records these criteria and keeps them ready to share.

The right to information

Workers may request information on their individual pay level and on average pay levels, broken down by sex, for categories of workers doing the same work or work of equal value. Employers must respond within two months.

Pay secrecy and the annual notice (Art. 7)

Contract terms that stop workers from disclosing their pay for the purpose of enforcing equal pay are prohibited. Every year, employers must inform all workers of their right to request pay information and of how to exercise it.

Who must report, and when

Employers with 250 or more workers report their gender pay gap annually, with the first report due by 7 June 2027. Employers with 150–249 workers report every three years, also first by 7 June 2027. Employers with 100–149 workers report every three years, first by 7 June 2031. Below 100 workers, reporting is not mandatory but transparency duties still apply.

What the pay-gap report contains (Art. 9)

Employers in scope report seven indicators, each relating to the previous calendar year:

1. the gender pay gap
2. the gender pay gap in complementary or variable components
3. the median gender pay gap
4. the median gender pay gap in complementary or variable components
5. the proportion of female and male workers receiving complementary or variable components
6. the proportion of female and male workers in each quartile pay band
7. the gender pay gap by category of workers, broken down by basic pay and complementary or variable components

All seven go to the national monitoring body, which publishes the first six. The seventh must also be given to all workers and their representatives. Management confirms the report's accuracy after consulting workers' representatives.

Comparing pay fairly: full-time equivalent

Because part-time work is done disproportionately by women, comparing raw pay would understate the gap. Parmetra normalises every salary to a full-time equivalent (a worker on half hours is compared at the full-time rate), so the reported gap reflects the rate of pay for the work, not how many hours each person happens to work.

Joint pay assessments (Art. 10)

Where a category shows a pay gap of at least 5% that the employer cannot justify on objective, gender-neutral criteria and does not close within six months, a joint pay assessment must be carried out together with workers' representatives. It documents the workforce by sex, average pay levels, the differences and their reasons, and the remedial measures taken. Parmetra structures this record end to end.

Compensation, burden of proof and penalties (Art. 16 to 23)

A worker who has suffered pay discrimination is entitled to full compensation, including back pay and related bonuses or payments in kind, compensation for lost opportunities, non-material damage and interest, with no upper limit fixed in advance. Once a worker establishes facts suggesting discrimination, the employer must prove there was none. An employer that has not met its transparency obligations carries that burden in any case, unless the breach was manifestly unintentional and minor. Limitation periods must be at least three years, and member states set penalties that must include fines, with specific penalties for repeated breaches.

Protection from retaliation and public contracts (Art. 24 and 25)

Workers and their representatives may not be dismissed or otherwise treated less favourably for exercising their equal-pay rights. In public procurement, contracting authorities may exclude, or may be required to exclude, bidders that breach pay transparency obligations or have an unjustified pay gap of more than 5% in any category of workers.