Malta’s Draft Pay Transparency Directive Implementation – What Employers Need to Know

1. Introduction

Malta has officially jumped on the pay transparency bandwagon with a newly published draft of regulations to implement the EU Pay Transparency Directive (EU 2023/970). The approach is careful and measured. They are dipping a toe into transparency rather than a full plunge. This draft marks the first step in Malta’s journey toward the Directive’s requirements, giving us a glimpse of what’s coming. Is it the whole story? Not quite. But it sets the stage, and it’s now on the table for employers to start preparing. In this overview, we break down Malta’s legislative approach and the key obligations (and omissions).

2. Legislative Approach and Implementation Scope

Malta’s implementation comes in the form of an amendment to existing regulations rather than a brand-new standalone law. Specifically, the Transparent and Predictable Working Conditions Regulations (under the Employment and Industrial Relations Act, Cap. 452) have been tweaked to include pay transparency measures. In plain terms, the government opted to slot the new rules into an established legal framework via a Legal Notice (L.N. 112 of 2025). This subsidiary legislation route means changes can roll out relatively quickly - the regulations are set to come into force within two months of publication in the national gazette.

So, what does the draft cover? It introduces some core definitions and basic transparency obligations:

• “Applicant for employment” is now defined in Maltese law as anyone seeking a job and under consideration by an employer (so yes, it covers all your job candidates).
• “Pay level” is defined as an employee’s gross annual pay and the corresponding gross hourly pay. By defining pay in both yearly and hourly terms, Malta is ensuring apples-to-apples comparisons, important in a workforce that might include part-timers or varying work hours.

Using these new definitions, the draft adds a fresh regulation on pay transparency both prior to employment and during employment. In essence, employers will have to share certain pay information with job candidates and employees (more on the specifics in Section 3). This approach covers some of the Directive’s headline requirements around salary disclosure and employees’ right to know how their pay stacks up.

However, Malta’s draft is not a full transposition of the entire EU Directive - at least not yet. Notably absent are provisions on formal pay gap reporting for larger employers, details on enforcement or penalties for non-compliance, and some of the more nuanced requirements (like transparency of pay-setting criteria and protections against pay secrecy clauses). In other words, Malta has tackled the low-hanging fruit (job postings and basic employee rights to information) but left the heavier lifts (like reporting obligations and sanction schemes) for another day.

3. Key Employer Obligations under the Maltese Draft

3.1 Pre-employment Pay Transparency

One of the immediate changes under the draft regulations is aimed at the hiring process. Employers in Malta will be required to provide pay information to job applicants up front. Specifically, for any prospective employee, the company must disclose:

• The initial pay, or salary range, for the position in question.
• Any relevant pay provisions from a collective agreement that apply to the role (if the company is covered by a collective bargaining agreement for that position). Essentially, if a union or sectoral agreement sets the pay or pay scale, the applicant has a right to know those details too.

This information has to be given “before the commencement of employment.” In practice, that means an applicant should receive these pay details by the time they are offered the job. The EU Directive encourages providing salary info early - even in the job ad or before interviews, but Malta’s text doesn’t pin it to a specific stage like the vacancy notice or interview. It simply ensures that no one starts a new job without knowing what they’ll be paid. It’s a step toward a more transparent hiring process, even if it’s not as aggressive as requiring salary ranges in every job advertisement from the get-go.

What about that common interview question: “So, what are you earning in your current job?” The EU rules forbid employers from asking about a candidate’s pay history, to prevent past salary discrimination from carrying forward. Malta’s draft, however, is silent on this point. The new Maltese regulations do not yet explicitly ban asking about salary history. This omission means that, as of now, Maltese employers could technically still pose the question. Wise employers may want to start phasing out that practice preemptively as we likely will see this being added in future amendments.

3.2 Right to Information for Employees

Under Malta’s draft rules, employees gain a new right to request pay information during their employment. Any worker can ask their employer, in writing, for two key pieces of info:

• Their own pay level
• The pay levels for categories of workers doing the same work as them. In plainer terms, an employee can ask, “How does my pay compare to others in my job category?”

The employer is obligated to provide a response within a “reasonable” time, with a maximum length of two months from the request.

A noteworthy point: Malta’s draft does not explicitly mention breaking down this comparative pay information by gender, whereas the EU Directive specifically asks that employees should be able to learn the average pay for men and women in those comparable categories. We may see further guidance or an amendment on this to align with the Directive’s intent.

Also, the draft refers to “same work” but not explicitly “work of equal value” in this context. This could mean employees are only guaranteed comparison data for colleagues in identical or very similar roles, not across different jobs of equal value. If so, Malta’s approach is narrower than the Directive’s initial intent (which would allow a female marketing specialist, for instance, to compare pay with a male sales specialist if those were considered equal value roles).

Who does this cover? Potentially all employers and all workers in Malta, with no exception by company size in the draft text. Whether you have 10 employees or 1,000, if one of them asks for this information, you need to comply. The two-month window is generous, but don’t sit on requests until day 59; prompt and clear replies will build trust (and avoid follow-up queries or complaints).

4. Gaps to the EU Pay Transparency Directive

While Malta’s draft is a first step, it doesn’t yet deliver the full package required by the EU Pay Transparency Directive (EU 2023/970). Several core elements of the Directive are missing or only partially addressed in the current text. Here are the most notable gaps:

• No pay gap reporting requirements: The Directive requires employers with 100+ employees to regularly report gender pay gap data starting in 2027. Malta’s draft doesn’t mention this obligation at all.
• No enforcement or sanctions framework: There’s currently no mention of how compliance will be monitored or what penalties employers might face for non-compliance. The Directive calls for “effective, proportionate and dissuasive” penalties. Malta’s draft is silent on all three.
• Limited scope on the right to information: Employees in Malta can request average pay levels for “same work,” but the draft doesn’t extend this to “work of equal value” or require the data to be broken down by gender. Both are core features of the Directive.
• No mention of pay-setting or progression criteria transparency: The Directive mandates that employees must have access to the objective, gender-neutral criteria used to set and progress pay. Malta’s draft skips this entirely.
• Lack of retaliation protections and pay secrecy bans: The draft doesn’t prohibit pay secrecy clauses or explicitly protect employees from retaliation for discussing pay or exercising their rights.
• No reference to “work of equal value”: Despite being a foundational concept in the Directive, Malta’s draft doesn’t define it or introduce any tools to help assess it.

In short, Malta’s draft gets the conversation started, but there’s still a lot left to say. More legislative updates will be needed to meet the Directive’s full scope before the 2026 transposition deadline. As such it is important that employers steer towards the requirements under the EU 2023/970 directive, and then adapt to local needs once the specifics are known.

5. Conclusion

Malta’s draft implementation of the Pay Transparency Directive signals a cultural shift in the workplace. For employers, even though the draft isn’t a complete picture, the direction is clear. Employers should steer towards compliance with the full directive, as Malta will be amending additional parts of the directive over the coming year.

As with any other exam, the prepared students excel, and the same applies to pay transparency. Below are a few things that you should consider getting started on now.

• Audit your pay structure - Use this lead time to conduct an internal pay equity audit. Identify pay gaps between employees in the same role, and broaden the analysis to ensure consistency under the “work of equal value” principle as well. If you find that, say, on average women in a certain job are paid less than men in the same job, investigate why. You’ll want to have a justification or a plan to close that gap. Remember that by 2027, if you’re a large employer, you’ll be reporting these stats publicly. In addition, remember that many companies are closing their salary budgets at the end of 2025, meaning you need to have a business case drafted and ready by then to ensure sufficient budget is allocated to potential necessary corrections.
• Document your pay criteria - Even though Malta hasn’t explicitly demanded it yet, it’s wise to have a clear write-up of how salaries are decided at your company. This could be an internal HR policy that outlines your pay grades, or the factors that influence merit increases. Not only will this prepare you for any future requirement to share it, but it also helps you consistently apply pay decisions.
• Engage and communicate - Consider informing your workforce proactively about these changes and the initiation of working towards compliance. Show your employees that you own the narrative, and you want to engage in this legislation under the merit of wanting to be and ensure you are a fair employer. Setting this tone can turn a potentially suspicious “gotcha” feeling into a collaborative “let’s ensure fairness together” vibe.