The European workplace is set for a major change next summer as new EU rules on pay transparency come into force, requiring companies to reveal salary details in job adverts and ban questions about candidates’ pay history. 

Under the directive, adopted in 2023 and due to be transposed into national law by June 7, 2026, employers will have to inform job applicants about the starting salary or pay range before interviews take place and share any relevant details from collective agreements. 

At the same time, employees will gain the right to request information on average pay levels for colleagues performing similar work, according to the Council of the European Union.  

This right applies to both individual employees and their representatives, ensuring greater accountability within companies of all sizes. 

The aim is to tackle pay discrimination and close the gender pay gap across the bloc.  

According to Eurostat, women in the EU still earn around 13 per cent less than men on average for equivalent work, a figure that has remained stubbornly high for over a decade.  

By ensuring greater openness about how salaries are determined, the EU hopes to make pay systems fairer, more transparent and more accountable. Importantly, the directive will also apply to job seekers, bringing transparency into the hiring process itself, a stage where pay inequality often begins. 

Moreover, member states will be required to ensure that companies have pay structures free from any discrimination based on sex.  

The assessment of comparable work will have to rely on objective, gender-neutral criteria such as skills, effort, responsibility and working conditions.  

These standards are designed to prevent both direct and indirect bias in pay decisions and to make salary structures easier to justify. 

The rules apply to all workers without exception, including part-time, fixed-term and temporary agency employees, as well as platform workers, trainees and apprentices.  

Even domestic staff and those on on-demand or voucher-based contracts will fall under the same framework, provided they meet the relevant criteria.  

In practice, this means that everyone, from part-time workers, apprentices to full-time employees, will be covered by the same transparency and equal pay protections.

The principle of equal pay covers far more than basic salaries. It extends to bonuses, overtime, travel or accommodation allowances, training grants, severance payments, statutory sickness benefits and occupational pensions.  

In short, any financial or in-kind benefit an employee receives in return for their work will count. 

To ensure consistency across member states, remuneration levels must be expressed as both gross annual and gross hourly pay.  

This uniform presentation will make comparisons between sectors, regions and roles more transparent and prevent pay gaps from being masked by different reporting methods. 

In addition, larger employers will face stricter reporting obligations. Companies with at least 250 employees will have to publish annual gender pay gap reports, while those employing between 100 and 249 workers must report every three years.  

Where the pay gap exceeds five per cent and cannot be justified by objective, gender-neutral factors, employers will be obliged to conduct a joint pay assessment in cooperation with employee representatives. 

The directive also sets out clear enforcement mechanisms. Employees who experience pay discrimination will have the right to seek compensation, including back pay, lost bonuses and other related benefits. Crucially, the burden of proof will shift from the employee to the employer, meaning that it will be up to companies to demonstrate that no discrimination occurred if their pay practices are challenged. 

Member states will be required to establish effective and dissuasive penalties, including financial fines, for companies that fail to comply.  

National equality bodies will be tasked with monitoring enforcement, collecting data and supporting workers in bringing cases to court. 

The directive also allows for collective action, meaning that trade unions and equality bodies will be able to represent groups of employees in legal proceedings, reducing the fear of retaliation or workplace pressure on individuals. 

In Cyprus, the measure is expected to reinforce existing equality legislation and require both public and private employers to update their internal pay policies.  

The Labour Ministry and Equality Authority will have to adapt local procedures to ensure alignment with EU rules, while companies will likely need to review salary structures, documentation and HR practices ahead of 2026. 

According to the European Commission, these measures are part of a broader effort to strengthen the long-standing principle of ‘equal pay for equal work or work of equal value‘, first enshrined in Article 157 of the Treaty on the Functioning of the European Union.

The commission has described the directive as a “game-changer” for gender equality, aiming to address the root causes of pay inequality through proactive transparency.