Emerging from a blue background, a pair of hands hold a pile of Euro bank notes towards the viewer. Across the top is written “EU Pay Transparency Directive a practical commentary. The RES Forum logo is in the bottom right corner.

Written by Pieter Cross

Over the years, the EU has been particularly active in strengthening employee rights. The EU Pay Transparency Directive, which must be transposed into national law by June 7, 2026, is one of the most far-reaching examples. While that date may seem distant, in implementation terms, it’s just around the corner.

This piece does not aim to unpack the technical details, there are many excellent consultancies already doing that and offering every imaginable compliance service. Instead, this is a practical commentary on what organisations should consider as the clock ticks towards summer 2026*.

 

Beyond compliance: a complex organisational challenge

The new legislation introduces a significant administrative and cultural burden. This is not something that can be achieved overnight. It requires senior-level sponsorship, meaningful budget allocation (including for IT licences), and long-term commitment of resources across European countries within HR but also for change and comms initiatives. Compliance will not be a one-time exercise but an ongoing transformation requiring sustained attention, communication, and change management.

The Directive has become necessary because self-regulation has failed. Pay inequities remain entrenched. While few employers welcome another layer of regulation, sometimes a firm external push is needed to move the needle. And it’s not just an EU issue. Similar initiatives are advancing in the US, the UK, and Australia, signalling a global movement toward pay equality and increased pay transparency.

 

Transparency starts at home

While some organisations have been preparing since the Directive’s adoption in June 2023,  many have chosen to wait, reluctant to be “first movers” or to disclose potentially sensitive information. This hesitancy is shortsighted. Transparency builds trust, and the sooner companies embrace it, the more control they retain over their own narrative.

A major internal milestone will be reached when organisations publish salary ranges. Often dismissed as “not part of our culture,” this will soon become mandatory. Once visible, employees will naturally ask questions:

  • Why am I in this range / band?
  • How are ranges determined?
  • Who benchmarks them, and how often are they reviewed?

Every employee will have an opinion, and every people leader must be ready to respond. HR must lead, but line managers need to understand and defend the company’s approach. A clear, consistent communication strategy is essential. There’s no room for ambiguity.

 

The end of pay secrecy

Under the Directive, employers will be no longer be able to restrict employees from discussing pay. Clauses enforcing pay confidentiality, long embedded in many employment contracts, will no longer be valid. This represents both a cultural and a legal shift. Open dialogue about pay will need to be normalised, supported by data, context, and empathy.

 

Market transparency and mobility implications

Transparency will extend well beyond company walls. Job postings will need to include salary ranges, allowing candidates to compare compensation across employers, locations, and even countries.

This has several implications:

  • High-demand talent will gravitate toward regions offering the best pay.
  • Non-EU talent will gain visibility into EU pay practices, likely prompting similar expectations elsewhere.

Forward-thinking organisations should define a company-wide position on pay transparency, ensuring consistency and fairness across all geographies.

 

Recruitment: a cultural shift

Publishing pay ranges may sound straightforward, but it fundamentally changes how recruitment is done. Perhaps the most striking change: asking candidates about their current salary will become illegal.

This question is so ingrained in hiring practices that unlearning it will require comprehensive training for Talent Acquisition teams and hiring managers. With published salary ranges, candidates will instead indicate where they see themselves within the ranges.**

Even a throwaway remark in an interview could lead to a claim, so education and vigilance are essential.

 

Engaging the European Works Council

For multinational organisations operating across the EU, it is critical to engage the European Works Council (EWC) early. The EWC can be a valuable partner in communication and will play a key governance role as implementation progresses. Having these colleagues on board - understanding the company’s goals, challenges, and compliance plans - will make a significant difference as deadlines approach.

 

Turning compliance into competitive advantage

In many cases, attention is focused on analysing data and ensuring the gender pay equality reporting is complete and compliant (a huge effort). However, the true differentiator will be how companies communicate and lead through this change. Much more than simply being a compliance requirement, the EU Pay Transparency Directive is an opportunity to build trust and strengthen employer reputation.

Now is the time to:

  • Launch a robust internal communication plan.
  • Engage employee representatives and the EWC early.
  • Prepare senior leadership and allocate necessary budgets.
  • Define a global pay transparency framework for consistency.
  • Brief non-EU leaders and employees to understand why these changes matter.

The “last call” bell is ringing right now. Use this moment to demonstrate leadership, fairness, and credibility. Turn the EU Pay Transparency Directive from a compliance burden into a strategic advantage - a hallmark of being an employer of choice in the new era of transparency.

 

*The national implementation timings and specifics may deviate so attention is needed to understand the local ratification of the directive in each EU nation state.

**Desired outcome is that job adverts include the pay range, but national deviations will exist and minimum requirement is that a candidate invited to an interview is informed of the planned pay range prior to entering the interview process.