A new era of transparency in remuneration: the European Directive changes the rules of the game

Why is this directive important?

Despite the existing legal provisions on equal treatment in employment relations in the V4 countries, including Slovakia and the Czech Republic, the practical application of these principles is still lagging behind. Gender pay discrimination is often hidden and difficult to prove. The new directive provides employees with tools to identify possible pay gaps and mechanisms to correct them.

Member States must implement the Directive in their legislation by 7 June 2026 at the latest. This means that companies have a limited time to prepare for the new requirements.

What will the Directive bring in practice?

The Directive sets out seven key steps to ensure equal pay:

1. Transparency in recruitment

Employers will be required to inform potential employees of the starting salary or salary range for the position prior to the job interview. It will not be possible to ask applicants about their previous salaries to prevent the carry-over of pay discrimination from previous jobs.

Job titles will have to be formulated in a gender-neutral way and the whole recruitment process will have to be set up in such a way as to avoid discrimination.

2. Transparent remuneration criteria

Employees will have the right to know on what criteria their pay is set. These criteria must be objective and gender-neutral. Smaller employers with fewer than 50 employees will have certain exceptions, but the basic principles will apply to all.

3. The right to wage information

Employees shall be given the right to written information on their wages and also on the average wages of other employees doing the same work, broken down by gender. Employers will have to respond to such requests within a maximum of two months.

Another important change is the abolition of the so-called pay secrecy – employers will not be able to prohibit employees from discussing their wages with their colleagues.

4. Mandatory pay gap reports

Companies with 100 or more employees will have to publish regular reports on the gender pay gap. If these differences exceed 5% and are not objectively justified, employers will be obliged to take corrective action.

The timeframe of duties varies according to the size of the company:

• Large enterprises with 250+ employees: first report by 7.6.2027, annually thereafter
• Medium-sized enterprises with 150-249 employees: first report by 7.6.2027, every 3 years thereafter
• Smaller enterprises with 100-149 employees: first report by 7.6.2031, every 3 years thereafter

5. Support for employers

In particular, Member States will need to provide support to smaller employers with fewer than 250 employees in the form of technical assistance, training and guidance on how to implement the requirements of the Directive.

6. Stronger enforcement mechanisms

The Directive significantly strengthens the position of employees who believe they are being discriminated against in pay. They will be able to claim not only income compensation but also compensation for the harm suffered, with no upper limit on the amount of compensation.

The key change is the shift of the burden of proof to the employer – who will have to prove that discrimination did not take place. The Directive also enshrines protection against retaliation and sets a minimum limitation period of three years for bringing an action.

7. Audit and adjustment of remuneration systems

Employers will need to review their existing remuneration systems to ensure they are transparent and fair. This includes:

• Establishing precise criteria for each position
• Regular comparison of men’s and women’s wages
• Identifying and eliminating unjustified differences
• Introduction of transparent remuneration rules

What should companies do now?

Although the deadline for implementing the Directive is not until 2026, companies should start preparing as soon as possible. We recommend the following steps:

1. Conduct an internal audit – analyse the current gender pay gap in your organisation
2. Reassess the remuneration criteria – are they truly objective and gender-neutral?
3. Prepare data collection systems – you will need reliable sex-disaggregated data
4. Retrain managers and HR staff – they need to understand the new requirements
5. Set up transparent processes – you can already start informing about salary ranges when recruiting

Early preparation not only allows you to meet legal requirements, but can also give you a competitive advantage. Transparent remuneration becomes an important factor in employer branding and attracting talent.

A new chapter for fair pay

The European Pay Transparency Directive is not just another bureaucratic measure – it is a real instrument to achieve pay equality, which has often been a mere lip service. For companies, this represents both a challenge and an opportunity.

Organisations that take a proactive approach to implementation can gain a significant competitive advantage. Transparent and fair remuneration strengthens employee loyalty, increases employee motivation and improves the employer’s reputation. At a time when the battle for talent is fierce, an open approach to remuneration can be a decisive factor.

It is time to start preparing today – not just because it will soon be a legal obligation, but because it is the right thing to do. Fair pay is not just about numbers on a paycheck, it’s about building a culture of respect and equality that is the foundation of successful 21st century organisations.

JUDr. Miloš Kvasňovský Opava, 14 May 2025 – MAXIN’S HR BUSINESS BREAKFAST