This European directive will force companies to reveal the salaries of their employees

© Pexels/Andrea Piacquadio

French companies will have to comply with the pay transparency rules of European Directive 2023/970 against pay discrimination and the gender pay gap in the EU. This directive was adopted by the European Council in April 2023 and must be transposed into national law before 7 June 2026 to apply.

What will change

But how will this directive combat the pay gap? First of all, it imposes transparency on companies. Employers will be obliged to inform job seekers of the starting salary or give a range. On the other hand, they will be prohibited from asking for candidates’ salary history.

As the Council explains, employees will also have the right to ask “information from their employer on average pay levels, broken down by sex, for categories of workers performing the same work or work of equal value”, as well as the criteria used to calculate pay increases.

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The directive will also require companies with more than 250 employees to report the gender pay gap every year. For companies with more than 150 employees (initially), this will be every 3 years. And if there is a gap of more than 5% that is not justified, the company will have to take measures.

Employees will be better equipped to combat the gaps

The directive also provides for compensation for employees who are victims of gender-based pay discrimination. And “it will now be up to the employer to prove that it has not breached EU rules on equal pay and pay transparency”, according to the European Council, and not the other way around.

• In 2023, the European Council adopted a directive that requires transparency for companies, in order to combat unjustified pay gaps, particularly between women and men
• This must be transposed into national law before 7 June 2026
• The directive will require employers to be transparent from the hiring process
• It also provides for compensation for victims of gender-based pay discrimination

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