Pay transparency: EU rules 2026

Pay transparency is progressively becoming a new regulatory standard in France and across Europe. Driven by EU Directive 2023/970, it requires companies to rethink how they communicate about pay, from job postings through to annual gender pay gap reporting. This legal shift is reshaping HR practices in depth, with deadlines now close at hand.

Pay transparency: definition and stakes

Pay transparency covers a set of obligations requiring employers to disclose, at different points in the employment relationship, information about pay levels within the company. It spans several areas: information given to candidates before hiring, employees’ right to know pay gaps with colleagues in comparable roles, and quantitative reporting sent to authorities and employee representatives.

The core stake is reducing the gender pay gap, which persists despite existing gender equality obligations. By making previously undocumented gaps visible, pay transparency shifts the burden of justification: it is no longer up to the employee to prove discrimination, but up to the employer to show that observed gaps rest on objective criteria, unrelated to gender.

This shift fits into a broader movement toward digitalizing HR practices, where pay data becomes a management indicator in its own right rather than information confined to the payroll department.

EU Directive 2023/970: the new regulatory framework

Adopted in May 2023, Directive 2023/970 on pay transparency sets a common framework for all European Union member states. Its stated goal is to strengthen the application of the principle of equal pay for equal work or work of equal value, relying on transparency mechanisms rather than after-the-fact enforcement alone.

The EU text imposes three families of obligations on companies: prior information for candidates about pay, the right to information for current employees, and periodic reporting on the gender pay gap. It also introduces a partial reversal of the burden of proof in gender pay discrimination disputes.

Objectives of the directive and companies concerned

The directive primarily targets companies with 100 employees or more for quantitative reporting obligations, with progressive thresholds by size: annual publication above 250 employees, publication every three years between 100 and 249 employees. The obligations to inform candidates and employees, by contrast, apply more broadly, generally without a minimum headcount condition.

Groups with several legal entities in France will need to clarify, once the transposition is finalized, whether the headcount threshold applies entity by entity or on a consolidated basis. This remains a key point of attention for HR directors of multi-entity groups.

Transposition timeline in France

France has not yet finalized its transposition law even as these obligations are due to take effect. This tight timeline leaves companies little room to wait for the final text before starting their compliance work.

New obligations for employers

In practice, the directive changes two key moments in the HR lifecycle: recruitment and the course of the employment contract. Each comes with distinct obligations, on top of the quantitative reporting already mentioned.

Before hiring: informing candidates

From the moment a job is posted, or at the latest during the first interview, employers will need to disclose the starting salary or a pay range for the role. They will no longer be allowed to ask candidates about their current pay or past pay expectations, a practice still common in many French recruitment processes.

This obligation requires upfront preparation: pay scales must be formalized and made consistent before job postings even go live, or risk exposing unjustified gaps once they become public.

During the contract: employees’ right to information

Once hired, every employee will be able to request their individual pay level as well as average pay levels, broken down by gender, for categories of employees performing work of equal value. Employers will need to respond within a set deadline, without being able to invoke pay confidentiality as grounds for refusal.

This internal disclosure requires the ability to quickly extract reliable, comparable pay data, which in turn requires HR information systems capable of cross-referencing pay, role and job classification consistently.

Penalties and burden of proof in case of non-compliance

Failing to meet pay transparency obligations exposes the company to administrative penalties, the exact level of which will be set by the French transposition law. Beyond direct penalties, the directive introduces a more structural mechanism: in the event of a gender pay discrimination dispute, it is now up to the employer to demonstrate that observed gaps rest on objective, non-discriminatory criteria, rather than up to the employee to prove discrimination.

This reversal of the burden of proof changes the nature of the legal risk. A company unable to justify its pay gaps with documented criteria faces an unfavorable presumption, regardless of any discriminatory intent. Compensation owed to employees recognized as victims of pay discrimination is also reinforced under the EU text.

How HRIS software supports compliance

Payroll software able to centralize pay scales, job classifications and raise history forms the basic building block for meeting the new obligations. Without this centralization, producing a consistent pay range for each job posting or responding to an employee’s information request becomes a manual, time-consuming and error-prone exercise.

A structured HRIS also makes it possible to simulate the impact of a new pay scale before publishing it, detect unjustified gaps within the same job category, and document the objective criteria used for each pay level. This traceability becomes a direct asset against the reversed burden of proof introduced by the directive.

Beyond the tool itself, this compliance effort fits into a broader HR digitalization of pay processes, where pay data stops being managed case by case and becomes a structured, shared management indicator across payroll, HR and leadership.

Interaction with the gender equality index and HR reporting

Pay transparency does not replace the gender equality index, mandatory since 2019 for companies with 50 employees or more, but it adds complementary requirements on top of it. Companies will need to manage both frameworks without conflating them: the index remains a single annual score, while the reporting introduced by the EU directive breaks down gaps by job category and pay component.

This interaction reinforces the importance of reliable, regular HR reporting, able to produce both the existing index and the new EU indicators without multiplying manual extractions. Companies that already have a consolidated HR dashboard start this double obligation with a head start.

How to prepare your company now

Waiting for the final French transposition law to be published exposes companies to a compliance window that will be too short once the text is known. An upfront diagnostic makes it possible to anticipate most obligations, regardless of the final timeline set by lawmakers.

Three concrete actions can start without waiting for the final text. First, map existing pay scales and identify gaps not explained by documented objective criteria. Second, train recruitment teams and managers to stop asking candidates about their current salary. Third, check that the HR information system can produce, on request, a pay comparison by job category and gender, without manual reconstruction.

This preparatory work, started ahead of the June 2026 deadline, turns a regulatory constraint into an opportunity to clarify a pay policy that was sometimes built hire by hire, without a documented overall logic.

Frequently asked questions