February 24, 2026
Category:
Pay TransparencyAuthor:
Adam Seoudi
/
Head of CX
The EU Pay Transparency Directive introduces a formal, enforceable right for workers to request pay information, designed to reduce information asymmetry that makes unequal pay hard to detect and challenge.
For employers, the practical “request” core can be summarised as three obligations that interact:
1. Make pay-setting rules accessible. Employers must make “easily accessible” the objective and gender-neutral criteria used to determine pay, pay levels and pay progression. Member States may exempt employers with fewer than 50 workers from the pay progression part, but not from the broader transparency direction.
2. Answer individual requests in writing, quickly. Workers can request (and must receive in writing)
(a) their individual pay level and
(b) the average pay levels, broken down by sex, for categories of workers doing the same work or work of equal value.
Employers must respond “within a reasonable period” and in any event within two months of the request. Workers can also ask for clarifications if information is incomplete or inaccurate.
3. Handle privacy and use-limits properly. Where responding risks revealing an identifiable person’s pay, Member States may require that only workers’ representatives/labour inspectorates/equality bodies access certain information, and personal data provided under the Directive must be used only for applying the equal pay principle (with GDPR compliance explicitly referenced).
Two more “pressure multipliers” matter operationally even if your focus is requests rather than litigation:
Transposition deadline: Member States must adopt the national laws needed to comply by 7 June 2026.
It is worth explicitly noting that the right to information introduced by the Directive applies to all employers, irrespective of workforce size. Unlike some reporting obligations that are threshold-based, the individual right to request pay information is not limited to large organisations. For many employers, this will be one of the first real “stress tests” of their pay architecture, data governance and internal communication. In our view, this element may prove operationally and communicatively more demanding than pay gap reporting itself. Reporting is periodic and largely data-driven; responding to individual requests is case-specific, time-sensitive and directly embedded in employee relations. For employers, that translates into a short runway and even if your country transposes late:
(a) employee expectations and union/works council agendas will move earlier, and
(b) “data readiness” work (job architecture, data definitions, audit trails) cannot be done credibly in a few weeks.
This will look different country by country (thresholds, interfaces with works councils, templates, enforcement bodies), but the trend is shared: more formalised processes, more standardised pay data, and less tolerance for “it depends” answers, because the Directive explicitly connects transparency to enforcement.
This article is not legal advice; the exact design will depend on national implementation.
Meaning: you proactively provide employees with their individual pay level and the average pay of comparable workers, broken down by sex, on a regular basis (for example at the beginning of each year), so they do not need to submit a formal request or wait for a response in order to access this information.
Why it can work well:
- Fewer formal requests later, during the year
- Less legal/employee-relations friction: when answers are standardised, you reduce the risk of inconsistent, case-by-case explanations that later look discriminatory even if they weren’t intended.
- Better management capability: managers can explain pay decisions using shared language, rather than improvising.
Trade-offs and risks
-You will surface actual pay differentials immediately. By proactively sharing individual pay level and gender-disaggregated averages for comparable roles, you expose existing gaps at scale - not selectively, but systemically.
-You may trigger a wave of follow-up questions. Even if no formal requests are required, employees who see differences will ask: Why am I below/above the average? If objective, gender-neutral criteria are not clearly documented and consistently applied, this becomes an operational and legal risk.
-Earlier pay correction pressure (budget impact).
Once employees see averages, unexplained gaps become harder to defer. Transparency compresses the time between identification and correction.
-Comparator group credibility risk. If employees do not trust how “comparable work” is defined, the average itself may be challenged. The methodology must therefore be robust and defensible.
-Reputational and cultural impact. Sharing averages without parallel explanation of what drives pay positioning (skills, scope, tenure, performance, market premiums) can lead to misinterpretation, even when differences are objectively justified.
Meaning: you do the minimum required, and handle information requests as they come (HR/Legal “ticketing” approach).
Why some organisations choose it:
- Lower immediate change-management effort (no big comms programme, no new internal transparency norms).
- Useful if you are mid-restructure, or if your job architecture is not stable enough to publish.
Operational downsides:
- High risk of chaos: different request handlers produce different comparison groups, different pay definitions, and different narratives. Under a two‑month deadline, that inconsistency becomes a repeatable failure mode.
- Request spikes can overwhelm HR quickly, especially after “trigger events” (see below).
- More escalations: once requests become contentious, the Directive’s wider enforcement ecosystem (burden of proof, access to evidence) makes poor documentation a real liability.
When each model makes sense
If your organisation already has stable job architecture, pay bands and documented reward principles, Model A is usually the lower-cost long-run choice. If you lack those fundamentals, a pure Model A “publish everything” approach can backfire; in that case, a hybrid is often best: publish criteria + structure first (Article 6), then phase in average pay levels once definitions are defensible.
At the same time, this design should be assessed through a GDPR lens. The Directive clearly defines when and in what context employers must provide individual pay information and gender-disaggregated averages. Moving to proactive, blanket disclosure (e.g. automatic annual release of averages to all employees) could be interpreted in some jurisdictions as going beyond what is strictly required, raising questions of data minimisation and purpose limitation. Some early national draft approaches (for example, in Italy) appear to explicitly allow employers to provide this information proactively, not only upon request. However, this flexibility is not visible in all draft implementations to date. Until national transposition is finalised, employers should therefore assess whether proactive disclosure aligns with domestic implementing law and local data protection authority guidance.
Model B (request-only) is most defensible as a short bridge strategy when you have a clear, dated plan to move towards standardisation - otherwise you are effectively betting that request volumes stay low forever. It may also be the pragmatic choice if your objective is to implement the legal minimum without actively facilitating uptake for example due to limited data readiness, uncertainty around comparator methodology, unresolved structural inconsistencies, or an organisational culture that is not yet prepared for proactive transparency.
In parallel, you should seriously consider automation that allows you to absorb the operational load within HR Operations. If volumes increase, a manual, email-based process will quickly overwhelm HR and Legal; workflow automation, data integration and templated responses become essential to keep response times compliant and outputs consistent.
Germany’s "Entgelttransparenzgesetz" provides a useful comparison point. Under that law, employees in any company or public agency with more than 200 staff can request pay information (and then only every two years). It also urged large employers (500+) to conduct pay reviews and introduced pay reporting for large firms. The first official evaluation (covering the initial period to 2020) found that the disclosure right was used only sparingly: “during the introduction phase… the right to information was only asserted with restraint”. Instead, many companies chose to review their pay structures internally. Crucially, “overall, the Entgelttransparenzgesetz and its instruments were not sufficiently known”. In other words, low awareness was the main reason for few requests.
By the second evaluation (published 2023), the picture was similar. Survey data indicated that only about 4% of eligible employees had ever asked for information. From the employer side, just 6% of public-sector units and 19% of companies (with >200 staff) reported receiving at least one request. These numbers align with the first evaluation (which found ~14% of firms had any request). In short, most organizations saw no requests in a given year, though requests were more common in larger firms and those with works councils.
Several factors explain these low figures under the old law. As noted, many HR managers simply assumed no unfair gaps existed (over 70% expressed this belief). Combined with limited publicity and confusion over the procedure, employees often didn’t realise they could ask. Some anecdotal evidence suggests concern about repercussions played a role (though official studies did not find fear to be a leading factor). In any case, the German data show that without active prompting, even a legal right to salary info is taken up by only a small minority.
However, the EU Directive changes the context. First, it applies to all workers (not just in 200+ firms), so more people will learn they are eligible. Second, and most importantly, employers will be required to remind employees about this right at least once a year and explain how to use it. This annual notification (with guidance) did not exist in Germany before, and it should substantially raise awareness. In practice, one can expect far more enquiries once employees are routinely told “You can ask, and here’s how.” In short, the old German uptake (4%) is a floor, not a ceiling, for what might happen under the new rules. Employee support organizations and some Member States already anticipate that pay information requests will multiply once the Directive is in place.
To translate percentages into practice, consider three annual request-rate scenarios and a variety of company sizes:
These are illustrative calculations. For example, if 20% of staff in a 10,000-employee company sought pay information in a year, that would mean ~2,000 requests. We consider 20–30% a possible scenario (e.g. following a high-profile pay dispute or in highly transparent cultures).
Regardless of rate, it is crucial to note that “trigger events” can drive spikes.
These include: a recent reorganization, post-merger integrations, launching a new grading system or posting of salary bands (putting pay under spotlight), a hiring wave, media reports on pay gaps, rumors of unfair bonuses, union or works council campaigns, or even company-wide communications that inadvertently highlight disparities. Companies should plan for these by having their process ready before such events occur.
The key employer move is not to predict the exact percentage, it’s to design a process that works under medium load and doesn’t break under a short-lived spike.
Build the data foundation. Ensure you have a robust job architecture and pay data repository. This means defined job families/levels and a single “salary” definition (e.g. base + regular allowances). Identify the systems storing payroll, bonus, equity data. Align them so that whenever a request arrives, HR can quickly map the requester’s job to a “comparable group” and pull median pay figures. Document how you determine the comparator category on a request.
Pay definitions - Organisations should establish a single, internally consistent definition of “pay” for transparency purposes, covering base salary, fixed allowances, variable remuneration and, where relevant, benefits in kind, aligned with what can be reliably extracted from payroll and HR systems. The methodology should ensure consistent treatment of part-time employees (including clear FTE normalisation rules), currency conversion and defined pay periods. However, these definitions may need to be adapted to local legal guidelines and national implementing legislation, particularly where processes are centralised in an SSC model. In such cases, the global framework must be carefully calibrated to country-specific statutory requirements. Employers should also anticipate that reporting obligations may require actual paid amounts rather than contractual or target data and clarify whether the reference period is based on a rolling average, or the previous calendar year (this may differ across jurisdictions).
Define the process. Set up a clear intake channel (e.g. HR portal or form) and an internal workflow with approvals and an audit trail. Key steps include: verifying employee eligibility; assembling and validating pay data; comparing only those with equal value roles; drafting a standardized response; and obtaining final sign-off (HR/Legal). Templates for reply letters are very helpful. Crucially, assign a case owner (often HR or a compensation specialist) to avoid dropped balls. Because the Directive allows Member States to limit individual data sharing via works councils or equality bodies in some cases, clarify who (HR or council) delivers what to avoid privacy breaches.
Set communication and training. Explain the process to employees and managers in simple terms. Publish an FAQ: what information the request will include (own pay and average pay levels, not colleagues’ names!), who handles it, and how long it takes. Educate managers not to discourage questions; rather, they should see such inquiries as an opportunity to demonstrate fairness. Messages should emphasize trust and assistance. For instance, one approach is to frame transparency as a benefit. Ensure managers know the boundaries: e.g. don’t guess a colleague’s pay. This aligns expectations and reduces “chaos interpretations.”
Manage risks. Pay attention to confidentiality: the Directive explicitly requires data minimisation and allows routing certain info only to employee representatives. Prepare for potential disputes: keep documentation on how comparator groups were chosen and criteria applied, in case someone challenges the answer. And remember, employees have the right to disclose their own pay to prove a violation, so a casual tone is best in communications.
Tomorrow morning action. Pick one country, one legal entity, and one employee population. Try to generate, from real systems, a “response-ready” comparator calculation end-to-end. If you can’t do it in a day, you have found your critical path.
Whether employees use their new right often hinges on cultural factors and manager support. In open cultures, where pay information is already partly transparent, or where employees trust leadership, many may see the right as valuable and use it routinely to understand their career progression. In closed cultures, however, employees might still hesitate to ask.
Managers as gatekeepers vs. enablers:
If managers are made responsible for guiding or approving the request process, their attitude will color the outcome. A manager who treats a query as a career development discussion (e.g. “I’ll explain what drives salaries here”) fosters more questions; one who brushes it off as a nuisance will dampen engagement. Best practice is to involve line managers in communication but keep the formal response process centralized (so answers are consistent). Training managers on the Directive’s intent fairness and motivation can turn them into allies rather than barriers.
Framing transparency as a benefit:
Workplaces that position pay information as an employee benefit (like access to career planning tools) tend to see higher uptake. For example, some companies introduce annual “compensation reviews” where managers proactively share salary range position, effectively pre-empting many formal requests. Under the Directive, this “proactive conversation” model aligns perfectly: employees feel they have all the information, and HR handles the minority who still have questions.
Cultural readiness:
Trust is key. If the organization has history of punitive responses to salary talks, even an informed workforce may proceed with caution. On the other hand, a culture that values openness and equity will see employees using the right more readily. As a rule of thumb, the more collaborative the employee-management relationship (e.g. collective bargaining in place), the more two-way dialogue and requests will occur.
In essence, no process can be “one-size-fits-all.” The optimal approach depends on your existing culture. Still, across the board, clarity and encouragement from leadership will maximise the Directive’s positive impact.
The evidence suggests awareness and understanding are major volume drivers.
So communication is not “nice to have”; it is a workload-control lever.
What typically works best:
What to avoid:
- Announcing the right without explaining what employees will actually receive (averages by category and sex).
- “We will fix all pay gaps immediately” - you often need analysis first, and outcomes depend on objective criteria and national legal frameworks.
As query volumes increase, automation becomes a practical necessity. If you expect dozens or hundreds of requests annually, manual spreadsheets won’t scale. Key areas for automation include:
In short, automation ensures consistent, auditable answers as required by law. For example, if managers handle pay data differently across regions, an automated solution enforces the same rules everywhere. This not only saves time but also protects against errors: if the same answer goes out for similar job categories, there’s less chance of legal challenge.
At PayGap, we support employers by designing a structured, standardised workflow for handling pay information requests from start to finish. Our approach helps organisations define clear process steps, assign responsibilities, measure response timelines and document decision-making in a consistent and defensible way. We also help identify cases that may be more complex to communicate or that carry elevated legal, employee relations or reputational risk, enabling employers to prepare appropriate internal alignment and messaging in advance. The objective is not only operational efficiency, but controlled governance, ensuring that each request is managed consistently, within statutory deadlines and with a clear awareness of potential risk exposure.
Q: Will employees actually ask for pay info?
Under the German law (EntgTranspG) only a few percent of eligible employees had used the right, often because many simply weren’t aware of it. However, the new Directive requires employers to inform everyone annually about this right. This means awareness will rise sharply, so usage is likely to be much higher than under Germany’s old law. Cultural factors will still influence who asks, but expect at least several percent to inquire once they know they can.
Q: How long do we have to respond?
Employers must provide the information within two months of a valid written request (no extensions). In practice, a prudent internal SLA is 14 days to gather data, validate calculations and secure necessary approvals, leaving a buffer for legal or management review within the two-month cap. Employers should also monitor local implementing legislation, as Member States may shorten this deadline. For example, the current Polish draft implementation proposes a 30-day response period, which would require tighter internal workflows and earlier escalation of complex cases.
Q: Will employees see each other’s salaries?
No. The Directive explicitly prohibits revealing another individual’s pay. Instead, you provide the requester with: (a) their own pay level; and (b) the average pay of the comparable group, broken down by gender. If the group is small or disclosure would risk identifying a specific individual, national laws may allow the information to be routed via works councils or equality bodies to safeguard privacy. However, this approach is not uniform across Member States. For example, in the most recent Dutch draft implementation, no alternative delivery mechanism is provided even where the information could effectively lead to the identification of an individual employee’s pay, which creates additional privacy and governance considerations for employers operating in the Netherlands.
Q: Does this replace equal pay litigation?
No. This right to information is a diagnostic tool, not an adjudication. It can reveal potential pay gaps, but actual equal-pay claims still follow national equal pay laws. However, finding an unexplained gap through this right can be strong evidence if a case goes to court.
