EU Pay Transparency Directive: What It Means for Employers and Employees in 2026

The European Union is introducing a new set of rules aimed at increasing pay transparency and closing the gender pay gap. The Pay Transparency Directive (EU Directive 2023/970), adopted on 6 June 2023, introduces obligations that will fundamentally change how companies approach pay structures, hiring practices, and internal reporting.

Member States must transpose the directive into national legislation by 7 June 2026. Once in force, it will require significant changes from employers, particularly those with 100 or more employees.

Key Objectives

The directive aims to:

• Reduce unjustified pay differences.
• Strengthen the right to equal pay for equal work.
• Improve access to pay information for workers.
• Increase accountability for employers.

It provides tools for workers to compare salaries and demand fair treatment, while pushing companies to identify and address structural inequalities.

What Employers Must Disclose

1. Salary Information for Job Seekers

• Employers must inform job applicants about the initial salary or salary range for a role.
• This information must be based on objective, gender-neutral criteria.
• In some countries, this may be required directly in job ads.

2. Internal Transparency

• Employers must ensure easy access to information on pay determination criteria, salary levels, and pay progression paths.
• All criteria must be objective and gender-neutral.

3. Right to Request Pay Data

• Employees will have the right to receive written information about:

– Their individual pay level.

– Average pay levels by gender for workers doing the same or equivalent work.

Employees will not be able to access data on specific colleagues but only on grouped average figures.

4. Pay Disclosure Between Colleagues

• Employers must not restrict employees from voluntarily sharing their pay data if they do so to enforce their right to equal pay.
• Confidentiality clauses that prevent this will no longer be valid.

Reporting Obligations Based on Company Size

Company Size	Reporting Deadline	Frequency
250+ employees	by 7 June 2027	annually
150–249 employees	by 7 June 2027	every 3 years
100–149 employees	by 7 June 2031	every 3 years

Mandatory content of reports includes:

• Gender pay gap (mean and median)
• Gap in bonuses and variable pay
• Share of women and men receiving bonuses
• Pay distribution across quartiles by gender
• Gender pay gap by job category

If the average gender pay gap in any pay category exceeds 5%, and is not objectively justified or corrected within 6 months, the employer must conduct a joint pay assessment with employee representatives.

Enforcement and Penalties

Each Member State must adopt effective, proportionate, and dissuasive penalties for non-compliance. This may include:

• Administrative fines
• Compensation to affected employees
• Publication of violations

Workers must also be granted access to remedies, including:

• Legal proceedings
• Support from equality bodies
• Shifting the burden of proof onto the employer in cases of dispute

Technical and Administrative Support

The directive requires governments to provide technical infrastructure to support compliance. This may include:

• Templates and guidelines
• Tools for pay assessment
• Use of existing administrative data (e.g. tax or social security records) to monitor pay gaps

In Slovenia, it is expected that existing REK forms or similar payroll submissions could form the basis for reporting.

Current Legal Situation in Slovenia

Slovenian law currently prohibits discrimination on the basis of gender, including pay discrimination. However, there is no systemic framework for pay transparency.

• No obligation to disclose pay ranges before hiring
• No reporting requirements for employers with over 100 staff
• No right to access pay levels for comparable roles

Slovenia must implement the directive by 7 June 2026, otherwise direct enforcement will apply only in state-related cases.

Strategic Implications for Businesses

Companies operating in the EU should prepare by:

• Reviewing and updating salary structures
• Defining clear, neutral criteria for promotions and raises
• Training HR and legal teams on the new rules
• Establishing internal systems to collect and report pay data

Multinational corporations may choose to implement consistent policies across all EU locations, regardless of national differences.

Slovenia

Slovenia is already one of the most egalitarian countries in the world. In 2024, the gender pay gap was 5%, meaning women earned on average 95% of men’s gross hourly wages. According to Eurostat, Slovenia’s GINI coefficient stood at 23.6 in 2023, one of the lowest in the EU, indicating a high level of income equality.

The Pay Transparency Directive addresses remaining gaps by reducing information asymmetries and giving employees stronger tools to claim equal pay for equal work.

For employers, this means greater transparency and responsibility. It also introduces new compliance burdens, particularly for mid-sized and larger companies.

How SIBIZ Supports You

At SIBIZ, we support corporate clients, businesses, business professionals and digital nomads in navigating employment regulatory requirements across Slovenia and the EU.

If your company is hiring or operating in the EU, we can help ensure that you comply with the Pay Transparency Directive and other emerging obligations. Contact us today to find out more.

Contact us: www.sibiz.eu