EU Pay Transparency Directive 2026: employer's compliance checklist

Quick answer. EU Directive 2023/970 adopted on May 10, 2023 requires transposition into French law by June 7, 2026. It establishes four pillars: candidate's right to know the salary offered, ban on asking about salary history, 5% pay-gap reporting triggering a joint assessment, and reversal of burden of proof in discrimination disputes. As of June 7, 2026, France has not yet published implementing legislation — an ordonnance under the 2026 DDADUE law (EU Directives Transposition Act) is expected within weeks.

Directive 2023/970 builds on the EU's long-standing commitment to equal pay, strengthened by Directive 2006/54 (gender equality) and accelerated by Directive 2022/2561 (board composition) and several Court of Justice of the European Union rulings. By 2026, more than half of EU member states have already transposed it. France, a historical pioneer on gender-pay equity (Copé-Zimmermann law 2011, Rebsamen 2014, Pénicaud 2018), now faces an obligation to move beyond passive transparency (publishing an equality score) to active pay disclosure — giving each candidate and employee access to the actual salary structure for their role.

At Hayot Expertise, we have audited gender-pay-equality compliance for forty businesses between 20 and 500 employees in 2025. Our observation: most SMEs conflate index transparency (public-facing equality score out of 100) with pay transparency (individual access to the salary band). Directive 2023/970 clarifies this by creating an affirmative obligation to disclose at four touchpoints in the employment relationship.

Pillar 1: The candidate's right to know the salary band#

Starting at recruitment, every employer must disclose to the candidate either the specific salary offered or a salary range for the role. This information must be:

• clear and accessible (in writing, or orally if the candidate requests) ;
• linked to the job, not to the candidate's prior experience or negotiating skill ;
• consistent with what the employer actually pays for comparable roles in the organisation.

Omitting this disclosure — or quoting a salary band lower than what is genuinely paid — violates the right to information and creates a presumption of pay discrimination if a dispute arises later.

Pillar 2: Prohibition on requesting salary history#

Employers cannot ask candidates about their previous salaries, directly or indirectly (no « What were you earning before? » questions). This ban breaks the vicious circle of prior-salary anchoring: an employer paying a candidate EUR 35,000 just because they earned EUR 32,000 elsewhere has no objective justification. Only market value for the role may justify the offer.

Pillar 3: Pay gap of 5% or more triggers joint assessment#

When a unjustified pay gap of 5 % or more is identified between two employees doing work of equal value (same classification, comparable responsibilities, equivalent competencies), the employer must conduct a joint assessment with staff representatives to identify root causes and implement corrective measures.

The pay gap threshold considers:

• cumulative pay: fixe + variable + non-monetary benefits (converted to cash equivalent) ;
• reference group: applies to the employer's entire workforce ; in companies < 50 employees, assessment is recommended ; in companies ≥ 50 employees, it is mandatory ;
• objective justification: ancienness, performance, rare qualifications, geographic location ;
• 5 % is not a ceiling: exceeding 5 % does not automatically breach the law, but triggers analysis.

Pillar 4: Reversal of burden of proof in discrimination cases#

In alleged pay discrimination, the burden of proof shifts from the employee to the employer. Traditionally, the employee had to prove discrimination. Post-transposition, if the employee presents an index of discrimination (unexplained gap, lack of objective criteria), the employer must prove that the gap rests on objective and impartial grounds.

This proof must be documented and traceable (not merely asserted).

Transposition status as of June 7, 2026: France has not yet published a decree or law implementing the directive in the Official Bulletin. An ordonnance is expected as part of the 2026 EU Directives Transposition Act (DDADUE), currently being finalised by government.

Organisations with fewer than 50 employees#

• recommendation (not strict legal requirement): establish a salary band for each role ;
• immediate obligation: do not ask candidates about prior salary ;
• pay-gap assessment: recommended every 2–3 years (ESG best practice).

Organisations with 50–250 employees#

• obligation: disclose the entry salary or salary band in the job posting or communicate it to the candidate within 4 weeks of first contact ;
• obligation: do not ask about salary history ;
• obligation: if a pay gap ≥ 5 % exists between employees of equal value, conduct a joint assessment every 3 years ;
• record-keeping: maintain a log of assessed gaps and corrective actions.

Organisations with more than 250 employees#

• obligation: incorporate pay transparency into the Corporate Sustainability Reporting Directive (CSRD) or equivalent ESG reporting ;
• annual reporting: publish a pay-gap report detailing mean gap, median gap, and (where applicable) gap by category (executives, employees, workers) ;
• obligation: from 2027 onwards for largest firms, report aggregate M/F gap ; from 2031 onwards, report by job category ;
• corrective measures: formalise a 3-year action plan if aggregate gap exceeds 5 %.

1. Salary structure audit#

Create a compensation matrix by role: for each classification and seniority level, document:

• base salary (gross) and all benefits in kind (car, housing, meals, tech allowances) ;
• variable (bonus, commission, profit-sharing) ;
• actual seniority of role occupants ;
• gaps between lowest and highest pay for the same job title.

2. Gap identification#

3. Developing a pay scale#

Create a transparent pay scale: one scale per collective agreement + mapped adjustments (geography, sector, rare skills, seniority steps). The scale must be:

• documented in writing and consulted with staff representatives in firms ≥ 50 employees ;
• applied uniformly for equivalent roles ;
• reviewed annually for inflation and minimum-wage adjustments.

4. Candidate and employee communication#

• In the job posting: state « Salary: EUR 32,000–38,000 depending on experience » (or fixed for entry-level roles) ;
• In the offer letter: specify entry salary, pay progression policy and criteria ;
• internally: post an anonymised pay scale summary by role (not by person) to prevent perceived disparity ;
• For inquiring candidates: respond within 4 weeks to any salary-band request.

High-variability sectors (audit, management consulting)#

In audit firms, the same job title (senior auditor) can command EUR 36,000 in the provinces and EUR 48,000 in Paris, plus 5–20 % variable based on client origination. The directive requires clarity from the outset: « Salary: EUR 36,000–48,000 by location + client-origination variable 0–20 % » rather than burying the variable in opaque language.

Multi-site groups#

For multi-office groups, inter-office pay differences are acceptable if objectively justified and documented (regional cost-of-living, sector differences). An auditor doing identical work in Paris and Lyon may earn differently if a local market analysis supports it.

Atypical contracts (freelancers, short-term, interns)#

The directive applies to standard employment contracts. Freelancers / contractors are out of scope (no subordination). Interns fall under a separate regime: no strict equal-pay obligation, but transparency on required allowances is expected. CDD < 3 months should be treated like permanent contracts (same gap threshold).

Misuse of « commercial secrecy »#

Some employers claim « trade secret » or « business confidentiality » to justify pay opacity. This defence will not survive transposition: the directive establishes that employee rights to understand pay override commercial secrecy. An internal pay table cannot be classified « confidential ».

Confusing statutory minimums with competitive pay#

An employer paying only the statutory minimum (e.g., minimum wage) for a role where the market pays 30 % more will face scrutiny from labour inspectors or employment tribunal judges, even if it complies with law. The directive hardens this exposure: without objective justification (talent scarcity, qualifications), the gap will be held against the employer.

Overlooking variable pay#

A fixed salary of EUR 3,500/month advertised, but average variable bonus of EUR 1,000, creates a real compensation of EUR 4,500. The candidate must know this, or acceptance is based on material misrepresentation. The directive targets this exact loophole.

Missing documentation#

A pay review conducted informally (« Yes, we know it's unequal but can't do anything ») will not suffice. All assessed gaps and corrective actions must be documented, retained and auditable by a labour inspector or employment judge.

Recently, a mid-size audit-consulting firm (45 employees) engaged us to audit pre-transposition pay-equity compliance. Analysing their salary structure, we found an 8 % gap between two senior auditors with identical profiles (school, experience, client portfolios). The stated reason? « One negotiated harder than the other. » This gap was, implicitly, without objective foundation. After discussion, we recommended a phased harmonisation over 2 years (targeted raises for the lower-paid staff member) instead of an immediate equalisation (budget shock). The firm committed to this roadmap.

The lesson: Directive 2023/970 does not mandate absolute equality, but it does mandate documentation and objective justification of every gap. An employer who can say « This gap exists because the provincial role costs less than Paris » or « This person supervises two junior staff; the other supervises none » will survive scrutiny. One who shrugs and says « No idea, that's just how it is » will face sanctions.

Hayot Expertise advice. Starting immediately, undertake an internal pay audit: build a compensation matrix by role, identify all gaps > 5 %, document the cause of each (objective fact or latent discrimination), and present a regularisation roadmap to your staff committee if required. This audit creates no legal exposure if the transposition hasn't yet taken effect, but it positions you as proactive the moment the law comes into force. An SME arriving at the labour inspectorate with a pre-audited file looks far more credible than one discovering gaps under investigation.