EU Pay Transparency: not all smooth sailing

Most EU countries have missed the deadline for the Pay Transparency Directive. It was due to be law in all 27 member states by 7 June 2026, but only Italy, Lithuania, Malta and Slovakia were ready on time. Greece has since followed, with rules taking effect on 1 November, and Estonia has brought in part of the Directive. The Netherlands and Finland are aiming for January 2027 and Denmark for March 2027. France is aiming for 2028 for most of its rules. Spain’s bill has stalled because of the election. In all, more than 20 countries have yet to fully comply.

For multinationals, this means a patchwork of different dates, thresholds and reporting rules rather than one regime. It is tempting to treat the delays as breathing space, but the Commission has made clear there will be no pause.

The June deadline applied to governments, not employers. Employers’ obligations come from national law as each country transposes the Directive. The Directive’s own reporting date has not moved: employers with 150 or more staff are due to publish their first gender pay gap report by June 2027, based on 2026 pay data. Some countries have set later dates, but employers shouldn’t rely on that. The data for that first report is being generated now.

The core requirements set by the Directive include:

• pay ranges for job candidates
• no questions about pay history
• clear criteria for how pay is set and progresses
• the right for employees to ask how their pay compares with colleagues doing work of equal value

Readiness is a separate question from the legal timetable. In our experience, many organisations have introduced at least one transparency measure, but few are fully prepared, and data quality is a common concern.

At this stage, it makes sense to focus on:

1. Bring job and pay data together. Answering an employee’s question or producing a report is hard when the data sits in different places, at least not easily.
2. Build pay structures that can adapt. Rules will vary by country, so structures need to flex without being rebuilt each time.
3. Prepare managers. They will get the questions first, so give them the training and tools to explain how pay is set.

As a general rule, it is sensible to remain pragmatic, and evolving the company’s approach progressively.

MM&K is a leading independent adviser to PE firms and their portfolio companies on the design and implementation of human capital solutions and tailored pay structures. If you are curious  or want to explore how MM&K could assist your Board to optimise the advantages of aligning pay, strategy and culture, contact Rob Miller (robert.miller@mm-k.com) or Stuart James (stuart.james@mm-k.com).

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