With the pub­lic con­sulta­tion on the draft decree for the imple­ment­a­tion of the European Pay Trans­par­ency Dir­ect­ive, it is becom­ing increas­ingly clear what employ­ers will be required to report. Although atten­tion often focuses on the admin­is­trat­ive oblig­a­tions, the new reg­u­la­tions primar­ily touch upon a core prin­ciple of employ­ment law: equal pay for equal or equi­val­ent work.

Employ­ers with 100 or more employ­ees will be required to report peri­od­ic­ally on pay gaps between men and women. In addi­tion, employ­ees will be gran­ted the right to request inform­a­tion about their pay level and the pay cri­ter­ia applied with­in the organ­isa­tion.

In this con­text, it is import­ant to recog­nise that the offi­cial reports will not always reflect the full remu­ner­a­tion pack­age. A few not­able points: employ­ers will be required to report on gross pay, base salary, and vari­able pay com­pon­ents. A strict rule applies: no adjust­ments may be made for part-time work or incom­plete years. Cer­tain allow­ances and bene­fits des­ig­nated as final-levy wages under the work-related costs scheme (werkkos­ten­re­geling) fall out­side the scope of the report. How­ever, this does not mean that these employ­ment con­di­tions are leg­ally irrel­ev­ant. In a dis­pute con­cern­ing equal pay, such bene­fits may indeed be taken into account.

Do you also engage agency work­ers or seconded per­son­nel? If so, the report must be divided into a sec­tion cov­er­ing your own employ­ees and a sec­tion cov­er­ing work­ers made avail­able to you. The staff­ing agency is obliged to provide all neces­sary inform­a­tion.

Employ­ee right to inform­a­tion.

Every employ­ee may, upon request, obtain access to their own pay level as well as the aver­age pay levels — broken down by gender — of col­leagues per­form­ing equal or equi­val­ent work. This right applies regard­less of the size of the organ­isa­tion.

There is a clear role for the works coun­cil. Man­age­ment must con­firm the accur­acy of the report and act­ively involve the works coun­cil through inform­a­tion and con­sulta­tion. This makes the report­ing exer­cise not merely an HR mat­ter, but also a mat­ter of employ­ee par­ti­cip­a­tion.

For employ­ers, the chal­lenge there­fore lies not only in meet­ing the report­ing oblig­a­tions, but also in identi­fy­ing poten­tial pay dis­par­it­ies in a timely man­ner and being able to demon­strate object­ive jus­ti­fic­a­tions for them. A thor­ough ana­lys­is of the cur­rent pay struc­ture and employ­ment con­di­tions can help pre­vent future dis­putes and leg­al risks.

The first reports may seem a long way off, but they will be based on data that must already be avail­able from 2027 onwards. That is pre­cisely why now is the time to gain insight into your own pay prac­tices and to identi­fy any areas of con­cern at an early stage.

What can you do now?

Organ­isa­tions that begin map­ping their pay struc­tures, the dis­tri­bu­tion of vari­able remu­ner­a­tion, and the com­plete­ness of their HR and payroll data now will avoid unpleas­ant sur­prises just before the dead­line. Giv­en the man­dat­ory role of the works coun­cil, it is also worth­while to ini­ti­ate that dia­logue in good time.

The Employ­ment Law prac­tice of HVG Law and the reward spe­cial­ists at EY advise employ­ers across the full spec­trum of employ­ment law issues relat­ing to the Pay Trans­par­ency Dir­ect­ive. Please do not hes­it­ate to get in touch to dis­cuss what this means for your organ­isa­tion.