EU Pay Transparency 2026: Obligations, Thresholds, Templates

1. What is the EU Pay Transparency Directive?

Short answer: The Pay Transparency Directive (Directive (EU) 2023/970) is the most far-reaching reform of European equal pay law since the Equal Treatment Directive 2006/54/EC. It is intended to reduce the gender pay gap by imposing reporting, information and corrective duties on employers.

Adopted on 10 May 2023, OJ L 132/21 of 17.05.2023. Member States have until 7 June 2026 to transpose the Directive into national law.

"Member States shall take the necessary measures to ensure that employers have pay structures ensuring equal pay for equal work or work of equal value." — Art. 4(1) Directive 2023/970

The requirement that the criteria for pay determination, pay levels and pay progression must be objective and gender-neutral is set out in Art. 6(1); the criteria for assessing the value of work (skills, effort, responsibility, working conditions) are governed by Art. 4(4).

In substance, the Directive builds on a requirement that already applies: under Art. 4 Directive 2006/54/EC, for the same work or work to which equal value is attributed, direct and indirect discrimination on grounds of sex is eliminated with regard to all aspects and conditions of remuneration. What is new is not the prohibition, but transparency, evidence and procedure.

The two strands of obligations — plan them separately

The Directive contains two strands of obligations that are independent of one another. Anyone who plans only the reporting strand overlooks the duties that also apply to small employers; anyone who thinks only about job advertisements overlooks the data work that a report presupposes.

For private employers both strands only arise with the national transposing law — the legal classification is set out in section 9.

2. Who is affected? The 100/150/250 matrix

Short answer: Two different groups are affected — the reporting obligations scale with the number of employees (100/150/250), while the pay transparency rights of applicants and employees apply regardless of size under the Directive. Three thresholds determine the frequency and level of detail of reporting:

How part-time staff, temporary agency workers and employees of affiliated undertakings are counted towards the threshold follows from the national transposing law (section 9). Practical recommendation: until then, document the threshold assessment in two versions — once as a headcount including these three groups, once without them. If the two figures fall on different sides of a threshold (100/150/250), that is the point at which the transposing act must be checked first.

The first strand of obligations is unaffected by the threshold — details on Art. 5 in section 4, on Art. 7 in section 3.

Do not confuse them: the thresholds under current German law

The 100/150/250 matrix is the content of the Directive. The German Pay Transparency Act (EntgTranspG) currently in force works with different thresholds, which remain unaffected as long as no transposing act is in force: the individual right to information exists in establishments with, as a rule, more than 200 employees §§ 10–12 EntgTranspG (details in section 3); the report under § 21 EntgTranspG applies only to employers with, as a rule, more than 500 employees that are at the same time required to prepare a management report under §§ 264, 289 HGB. The substantive equal pay requirement, by contrast, applies regardless of size — in Germany § 7 EntgTranspG and § 3 EntgTranspG, in Austria § 11 GlBG and § 3 no. 2 GlBG (wording in the overview in section 9).

3. Right to information: what employees can request

Short answer: Under Art. 7 Directive (EU) 2023/970, employees may request two items of information — their own pay and the average pay levels, broken down by sex, for the group performing the same work or work of equal value; the information must be provided in writing and no later than two months from the request (Art. 7(4)). Art. 7 contains no reservation for refusal or abuse.

Under Art. 7(1), employees may request information from the employer and receive it in written form:

1. Their own pay
2. The average pay levels, broken down by sex, of employees performing the same work or work of equal value

The pay criteria under Art. 6(1) are not part of the request for information — the employer makes those available proactively (content: section 1).

If the information received is inaccurate or incomplete, employees may under Art. 7(2) request additional clarifications and details as well as a reasoned reply. The only limitation built into the Directive is a data protection one (Art. 12(2) and (3) Directive 2023/970) — details in section 7.

Template: reply letter under Art. 7 — list of fields

An Art. 7 reply letter is complete once it covers six fields — receipt of the request, own pay, comparator group, sex-disaggregated average, aggregation check and date of dispatch.

1. Receipt of the request (practice: proof of compliance with the deadline) — record the date; it starts the two-month period under Art. 7(4)
2. Own pay of the person making the request (Art. 7(1))
3. Comparator group — employees performing the same work or work of equal value, delimited according to the criteria in Art. 4(4)
4. Sex-disaggregated average of that group (Art. 7(1))
5. Aggregation check — would the information disclose the pay of an identifiable worker? (Art. 12(3) Directive 2023/970, section 7) Two limits must be kept apart here: the aggregation limit of 4 persons per comparator group recommended in section 7 (practical value, not a statutory threshold) and the six-person limit under the current § 12 EntgTranspG, under which the comparator pay is not to be stated (table below, row "Conditions"). Until the transposing act, the six-person limit is the narrower one in the German procedure.
6. Date of dispatch (practice: proof of compliance with the deadline) of the written reply as evidence that the deadline was met

The Directive and current German law side by side

Anyone handling a request for information in Germany works under the EntgTranspG until the transposing act enters into force — not under Art. 7. The two entitlements differ in content, form and conditions:

Distinction from the GDPR: a request under Art. 15 GDPR is a different entitlement with a different deadline. Under Art. 12(3) GDPR, information on the action taken on a request under Art. 15 to 22 must be provided without undue delay and in any event within one month; the period may be extended by two months where the request is complex or where there is a high number of requests, and the data subject must be informed of this within one month together with the reasons. Anyone who handles both types of request in one mailbox will regularly miss one of the deadlines.

Protection of those making requests: nobody may be disadvantaged for requesting information. In Germany, § 16(1) AGG prohibits disadvantage for exercising rights and for refusing to carry out an instruction that breaches the Act; this also applies to persons who support employees or give evidence as witnesses. In Austria, § 13 GlBG (Part I) and § 27 GlBG (Part II) provide the same protection: nobody may be dismissed, terminated or otherwise disadvantaged in reaction to a complaint within the undertaking or to proceedings to enforce the equal treatment requirement. The basis in Union law is Art. 24 Directive 2006/54/EC.

4. Mandatory information in job advertisements: what Art. 5 requires

Short answer: Art. 5 Directive (EU) 2023/970 gives job applicants a right to information on the initial pay or its range for the position concerned, based on objective, gender-neutral criteria — for private employers, however, the obligation only takes effect with the national transposing act (section 9).

Under Art. 5(1) subpara. 2, this information is to be provided "in such a way as to ensure an informed and transparent negotiation on pay, such as in a published job vacancy notice, prior to the job interview or otherwise". The advertisement is therefore one of the permissible routes, not the only one.

Two further paragraphs are an inseparable part of this: Art. 5(2) prohibits asking about pay history in current or previous employment relationships. Art. 5(3) requires employers to ensure that job vacancy notices and job titles are gender-neutral and that recruitment processes are conducted in a non-discriminatory manner, so as not to undermine the right to equal pay for equal work or work of equal value.

Practical recommendation: including the information in the advertisement itself is the simplest compliance option (easier to evidence, less scope for dispute). Anyone relying on "prior to the interview" or "otherwise" must document delivery — otherwise it cannot be shown later that and when the information was provided.

Germany/Austria: irrespective of the Directive, § 11 AGG already applies in Germany today (a job must not be advertised in breach of § 7(1) AGG); in Austria, § 9 GlBG requires gender-neutral job vacancy notices — breaches are penalised by the district administrative authority under § 10 GlBG with a fine of up to EUR 360. § 9 GlBG allows an exception only where a particular sex is an indispensable requirement of the activity; gender-related remarks in the vacancy notice are not permitted. § 7(1) AGG applies, moreover, even where the person discriminating merely assumes that a protected ground is present; conflicting provisions in agreements are void under § 7(2) AGG — this also covers pay agreements.

5. Pay report: content & frequency

Short answer: the pay report requires a quantified gender pay gap based on the indicators in the minimum structure below; the frequency depends on the number of employees (section 2). The report under Art. 9 is considerably more detailed than the previous report under § 21 EntgTranspG.

Template: minimum structure of the pay report under Art. 9 (mandatory information for 250+) — for each row the indicator, the reference base and the master data without which it cannot be calculated:

The report is submitted to the competent national authority. That authority publishes aggregated data — the individual data are not public. Which body receives the report in Germany or Austria, and in what format, follows from the respective national transposing law.

A report is no substitute for substantive equal pay: the obligation not to pay less for the same work or work of equal value on grounds of sex exists regardless of whether a report is already due (references in the overview in section 9).

Practical recommendation: reporting work rarely fails because of the statistics, but because of the master data in the right-hand column — they cannot be made up at short notice.

6. Joint Pay Assessment from a 5 % pay gap

Short answer: the joint pay assessment is not triggered by a pay gap alone, but only where three conditions are met cumulatively — and only for employers subject to the reporting obligations under Art. 9. Art. 10(1) sets out the three conditions:

• The pay reporting shows a difference in the average pay level between female and male workers of at least 5 per cent in any category of workers (Art. 10(1)(a)) — the threshold is therefore reached at exactly 5 %, not only above it.
• The employer has not justified that difference on the basis of objective, gender-neutral criteria ((b)).
• The employer has not remedied the unjustified difference within six months of the date of the pay reporting ((c)).

The assessment is a joint assessment with the workers' representatives. Content: analysis of the causes of the gap, action plan, implementation tracking. The result is made known within the undertaking.

In practice the second condition is decisive: the justification must be based on objective, gender-neutral criteria — that is, on the same criteria that Art. 6(1) requires in any event (section 1). Anyone who has not documented the pay criteria will hardly be able to justify an identified gap with evidence in a dispute — and is therefore heading towards the six-month correction period under (c).

Practical recommendation: clarify in advance who on the employer side is responsible for the assessment (HR, remuneration, legal) and in which body it takes place with the workers' representatives. Record the cause analysis, the measure, the responsibility and the implementation status for each category of worker in a single version — reasons reconstructed after the event do not hold up in a dispute.

7. GDPR interface

Short answer: pay reporting is processing of personal data with its own legal basis and its own limits — the limitation does not follow from the special regime for sensitive data, but from data minimisation and the re-identification risk of small comparator groups.

Publication of individually attributable pay data is to be measured against Art. 6(1)(c) GDPR (legal obligation). Practical recommendation — not a statutory threshold: aggregate or suppress reports with fewer than 4 persons per comparator group — otherwise there is a re-identification risk: from a sex-disaggregated average of a very small group, the pay of individual employees can be calculated back.

Clarification on the legal basis: sex, or sex-related pay data, are not a special category of personal data. Art. 9(1) GDPR lists exhaustively: racial and ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, genetic data, biometric data for the purpose of unique identification, health data and data concerning sex life or sexual orientation. The limitation therefore does not follow from Art. 9 GDPR, but from the principle of data minimisation (Art. 5(1)(c) GDPR) and from Art. 12(3) Directive 2023/970: where disclosure would, directly or indirectly, reveal the pay of an identifiable worker, Member States may restrict access to workers' representatives, the labour inspectorate or the equality body. Under Art. 12(2) Directive 2023/970 the data may, moreover, be used only for the purpose of applying the principle of equal pay.

Art. 6(1) GDPR is exhaustive in this respect: processing is lawful only if at least one of the six grounds is met. Whether a data protection impact assessment is additionally required for a pay analysis is governed by Art. 35(1) GDPR: it must be carried out in advance where a type of processing is likely to result in a high risk to the rights and freedoms of natural persons; Art. 35(3) names as standard cases, among others, systematic and extensive evaluation of personal aspects with legal effect and large-scale processing of special categories of data. Where the analysis is carried out on the employer's behalf, Art. 28(1) GDPR applies: the controller shall use only processors providing sufficient guarantees of appropriate technical and organisational measures; the contract must cover the minimum content of Art. 28(3) GDPR.

Supervision Germany/Austria: data protection supervision lies in Germany with the data protection authorities of the Länder (private sector, supplemented by the German Federal Data Protection Act (BDSG)), and in Austria with the Austrian Data Protection Authority (Datenschutzbehörde) on the basis of the GDPR and the Austrian Data Protection Act (DSG). Competence follows in Germany from § 40(1) BDSG and in Austria from § 18(1) DSG.

Adjacent obligation: AI-supported pay and selection decisions

Anyone having pay bands, gradings or applicant selection prepared by an AI system is additionally subject to the EU AI Act (Regulation (EU) 2024/1689): Annex III no. 4(b) covers AI systems for decisions affecting the terms of work-related relationships, promotion and termination. The high-risk obligations apply to Annex III systems only from 2 December 2027 (Regulation (EU) 2026/1744 (Digital Omnibus AI)); employers are then subject, as deployers, to the obligations under Art. 26 AI Act. A fundamental rights impact assessment under Art. 27(1) AI Act, by contrast, does not apply to private employers with Annex III no. 4 systems, provided they are neither bodies governed by public law nor providers of public services. Deployer obligations in detail, deadlines and case law are set out in the related article Algorithmic discrimination in recruitment.

8. Fines & reversal of the burden of proof

Short answer: the Directive itself names no amount. Art. 23 requires "effective, proportionate and dissuasive" penalties including fines, which are laid down in accordance with national law — the specific level therefore follows from the national transposing act.

Fine figures circulating for Germany are not a reliable basis as long as no transposing act is in force (section 9).

More important than the fine: Art. 18 Directive 2023/970 provides for a reversal of the burden of proof. Where employees present facts from which discrimination may be presumed (e.g. a pay difference for identical work), the employer must prove the contrary — the EU Directive thereby tightens the line already applied in Germany. The Federal Labour Court (BAG) 8 AZR 488/19 (21.01.2021) already recognised the reversal of the burden of proof under § 22 AGG; under BAG 8 AZR 300/24 (23.10.2025), a pair comparison with a single, highest-paid male colleague is already sufficient to trigger the presumption under § 22 AGG or § 7 EntgTranspG — a median comparison is not required for that. Under BAG 8 AZR 450/21 (16.02.2023), "better negotiating skills" do not justify a pay difference. Only the objective, gender-neutral criteria that Art. 6(1) Directive 2023/970 requires in any event therefore hold up as a justification.

Austria — different legal basis: there the AGG does not apply, but the Austrian Equal Treatment Act (GlBG); instead of a reversal of the burden of proof, prima facie evidence of the discrimination is sufficient. Competence lies with the labour and social court and, out of court, with the Ombud for Equal Treatment (GAW) and the Equal Treatment Commission — not with the German Federal Anti-Discrimination Agency (Antidiskriminierungsstelle des Bundes). References and legal consequences in detail are set out in the following overview.

Entitlements and deadlines compared: Germany and Austria

Germany caps compensation for non-recruitment at three months' salary where the person would not have been recruited even in a selection free of discrimination (§ 15(2) AGG); Austria works with minimum amounts; the period for asserting claims is two months in Germany and, depending on the claim, 14 days to three years in Austria. All figures are current national law, not the content of the Directive.

Data protection penalties alongside

Anyone processing or publishing pay data without a sound legal basis risks a fine under the GDPR irrespective of pay transparency law. Breaches of Art. 5, 6, 7 and 9 GDPR as well as of the rights of the data subject (Art. 12 to 22 GDPR) fall under Art. 83(5) GDPR — up to EUR 20,000,000 or 4 % of the total worldwide annual turnover of the preceding financial year; breaches of Art. 25 to 39 GDPR (such as processing on behalf of a controller or the data protection impact assessment) fall under Art. 83(4) GDPR — up to EUR 10,000,000 or 2 %, whichever is higher.

9. Status of transposition in Germany/Austria/Switzerland

Short answer: as at 17 August 2026, there is no German transposing act; according to BT-Drs. 21/7026, the competent federal ministry is still clarifying individual questions. Art. 34(1) Directive (EU) 2023/970 obliges Member States to bring into force the necessary laws, regulations and administrative provisions by 7 June 2026; for private employers the specific obligations under the Directive only arise with the national transposing act. In Austria, too, no transposing act was in place as at 17 August 2026. Switzerland is not directly affected but retains the Logib audit obligation from 100 employees.

Clarification — what the expiry of the deadline on 7 June 2026 means in law: under Art. 288(3) TFEU a directive is binding only on the Member States to which it is addressed, and leaves the choice of form and methods to them. Where transposition does not take place, a directive may after expiry of the deadline at most have direct effect against the State and State bodies (vertical direct effect); between private employers and employees it has no direct effect (no horizontal direct effect, CJEU, judgment of 14.07.1994 — C-91/92 Faccini Dori). The "primacy of application" concerns the precedence of directly applicable Union law over conflicting national law and does not in itself create employer obligations. Until national transposition, the EntgTranspG and the AGG therefore apply to private employers; interpretation of existing law in conformity with the Directive remains possible. Practical consequence: preparation yes, but the obligation to provide information on the initial pay or its range before recruitment or to produce a pay report does not arise automatically on the cut-off date.

The transposition deadline applies to Austria in the same way (7 June 2026).

What already applies today in Germany and Austria

As long as transposition is outstanding, employers work with the national law in force. The following overview names national law only, not the content of the Directive.

Also national law in force, set out elsewhere in this article: the individual right to information under §§ 10–12 EntgTranspG (section 3), the requirement of gender-neutral job vacancy notices under § 11 AGG and § 9 GlBG (section 4, penalty range in section 8) as well as protection against disadvantage for exercising these rights under § 16(1) AGG, § 13 GlBG and § 27 GlBG (section 3).

10. 8-step checklist for preparation (first date of the reporting obligation under the Directive: 7 June 2027)

Short answer: eight steps — threshold, job evaluation, advertisement workflow, information SLA, pay gap baseline, reporting fields, assessment process, DPO briefing. The deadline in Art. 34(1) expired on 7 June 2026; all eight steps remain preparation, because the specific obligations under the Directive only arise with the national transposing act (section 9) — the exceptions are the anchors that already apply nationally, § 11 AGG § 9 GlBG §§ 10–12 EntgTranspG, as well as the data protection obligations that apply independently of them (Art. 28, Art. 35, Art. 37(1) GDPR, § 38(1) BDSG).

1. Clarify the threshold — number of employees, definition of employees (part-time ratio, temporary agency workers), subsidiaries. Why: the number of employees determines the first date and frequency of the reporting obligation (section 2) and, in Germany, additionally whether the right to information under §§ 10–12 EntgTranspG applies at all (section 3).
2. Produce a job evaluation — gender-neutral criteria, define "same work / work of equal value" clusters. Why: without clusters there are neither comparator groups for the information request nor categories of worker for the report. Anchors: Art. 4(4) and Art. 6(1) Directive 2023/970 Art. 4 Directive 2006/54/EC (section 1).
3. Adapt the job advertisement workflow — pay range as a mandatory field in the HR system, update templates. Why: what Art. 5(1) to (3) requires and which national provisions already bind today is set out in section 4.
4. Establish an information process — request form, reply template, two-month reply SLA. Why: the list of fields and the distinction from the deadline in Art. 12(3) GDPR are set out in the reply letter template in section 3; anyone setting up the process also settles protection against disadvantage there.
5. Pay gap baseline analysis — median comparison per category of worker + quartile distribution as the 2025 actual position. Why: before the first reporting obligation the baseline shows where a gap of at least 5 % is looming (section 6); on the data protection side, data minimisation and the aggregation limit from section 7 apply.
6. Make the Art. 9 reporting fields fillable today — minimum structure and master data requirements in section 5. Why: the receiving body and the transmission format only follow from the national transposing law (section 5); the indicators in Art. 9 can already be prepared independently of that.
7. Set up the joint pay assessment process with the works council — 5 % threshold, six-month correction period. Why: justification or correction within six months prevents the joint assessment — cumulative assessment in section 6.
8. DPO briefing — GDPR-compliant reporting, aggregation thresholds, re-identification risk. Why: the designation obligation follows from Art. 37(1) GDPR, supplemented in Germany by § 38(1) BDSG; Austria provides for no additional numerical threshold (§ 5 DSG governs confidentiality and independence from instructions in the public sector) — details in the FAQ on the impact assessment and the data protection officer.

Practical rhythm for ongoing operation

Five building blocks carry ongoing operation — from the quarterly sample of advertisements to the running log of information requests. Practical recommendation — not a statutory deadline: the rhythms are values drawn from implementation practice, not a requirement of the Directive or of national law.