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Once I raised a pay equity issue. On that very day, I was taken off the talent list.

I had felt proud when I was promoted into a higher-grade role with broad responsibilities, even though I found the salary low for the position. This unfortunate scenario often occurs when internal candidates are promoted without proper salary alignment, while external hires are brought in with more competitive packages. I hoped there would be an adjustment if I proved myself, if they saw how much and how well I was working. But my functional leadership couldn’t see it – partly because I did not yet realize the value of making my work visible. (A reminder to myself: let’s make that the topic of my next article!)

That comment stayed with me. I felt it was unfair, dismissive, and frankly humiliating. And it perfectly illustrates why this new EU Directive matters: without structured transparency, raising valid questions about fairness is too often reframed as a personal weakness rather than recognized as a systemic issue.

Now watch how the world is changing! With the EU’s legislative framework: for the first time, employers will be legally required to ensure pay transparency and accountability.

During my work as regional and later as global HR professional, I have seen many countries’ practices up close. Cultural and economic differences aside, one thing was the same: too often men were paid more.

Were women considered a “risk” because family responsibilities fell more on them? Or was there an even stronger, often unspoken assumption: that men were more resourceful, smarter, more capable? And so women, if they wanted to build a career, did they have to work twice as hard – just to prove they were equally valuable?

If so, this new Directive challenges those ingrained practices and provides a clear legal framework to enforce equal pay.

• Transparency: Employers will need to disclose pay ranges and include the starting salary in job postings.
• Work of equal value: Job evaluation must be based on four criteria – skills, effort, responsibility, and working conditions.
• Reporting obligations: Employers above certain thresholds will have to report gender pay gap data.
• Employee rights: Employees will have the right to request information about their pay and the pay of colleagues performing comparable work, and employers must respond within 60 days.
• Reversal of the burden of proof: In cases of suspected discrimination, it will be the employer’s responsibility to prove that no unequal treatment occurred.
• Legal consequences: Effective compensation, recurring fines, and even exclusion from public procurement processes.

The obligations for employers are not yet in force – they will become fully applicable and enforceable from 7 June 2026. This means that right now we are in the preparation period, and companies should already be getting ready.

The Directive tailors its requirements according to employer size.

• Large enterprises (250+ employees) must publish detailed gender pay gap reports annually beginning in 2027.
• Medium-sized companies (100–249 employees) are required to report gender pay gap data every three years.
• Small enterprises (<100 employees) are generally not required to produce formal gender pay gap reports. However, starting from 2026, they remain subject to core transparency obligations. Importantly, individual member states may choose to impose stricter requirements, potentially extending reporting to smaller firms.

This distinction means that larger organizations must begin building robust reporting systems now, medium-sized employers need to plan for less frequent but still mandatory disclosures, and smaller firms should focus on transparency in hiring and internal processes while monitoring national implementation closely.

Although the Directive’s main objective is to close the gender pay gap, its implications go further.

• Employees of all genders will gain the right to request information about their pay compared to colleagues performing the same or work of equal value.
• Job applicants will benefit as well: employers must include salary ranges in job postings and cannot ask candidates about their previous pay history.
• Fairness and transparency become structural principles in pay setting, not just gender-related corrections.

In practice, while women are expected to benefit most from greater transparency, the Directive reshapes the entire pay culture, giving every employee stronger rights and clearer expectations.

• How can we design an evaluation system that fairly determines “work of equal value”?
• How should we address pay compression, when new hires’ salaries catch up, putting pressure on existing employees’ pay levels?
• How does the Directive align with existing tax benefits, such as exemptions for women or young employees?
• Are organizations ready for the required reporting and transparent communication?

Implementing pay transparency affects almost every part of the organization:

• HR processes: job evaluation, salary structures, recruitment practices.
• Systems: HRIS, payroll, reporting tools.
• Leadership behavior: how leaders talk about pay, fairness, and trust.
• Employee experience: transparency changes expectations, creates new norms of fairness, and may surface dissatisfaction.

A thorough change impact analysis helps identify which groups are most affected and what resistance is likely to arise.

No change of this scale can succeed without active and visible sponsorship. Senior leaders must not only sign off on reporting systems but also model transparency themselves. This means communicating consistently about why the organization is embracing pay transparency and how it aligns with company values.

Leaders at all levels need to be prepared to act as communicators, advocates, and resistance managers – helping their teams process sensitive information and reinforcing the message that transparency builds fairness, not division.

Pay transparency will inevitably raise questions: “Why is there a difference between me and my colleague?” or “What will change in my salary?” A strong communication plan should:

• Deliver clear and consistent messages about why transparency matters and what employees can expect.
• Use trusted senders – senior leaders for the strategic “why,” line managers for the personal “what it means for me.”
• Anticipate tough questions and provide managers with FAQs, scripts, and talking points to handle them.
• Emphasize dialogue: create safe spaces for employees to raise concerns and get answers.

Managers will be on the frontline of this change. They need support and tools to:

• Handle sensitive pay-related conversations.
• Address perceptions of unfairness.
• Link transparency to broader organizational goals.
• Maintain trust even when delivering difficult messages.

This often requires targeted training, coaching, and role-play scenarios so managers feel confident and consistent in their responses.

Resistance is inevitable – particularly when salary information becomes more visible. Employees may feel disappointed, managers may feel exposed, and leaders may worry about reputational risk. Effective resistance management means:

• Identifying early signs of resistance (silence, skepticism, misinformation).
• Engaging directly with those most affected.
• Providing forums where employees can voice concerns without fear.
• Turning skeptics into advocates by involving them in co-creating solutions.

Transparency cannot be a one-time compliance exercise. To sustain it:

• Establish regular reporting cycles and internal audits.
• Monitor adoption with feedback loops.
• Celebrate progress – small wins matter in building long-term cultural change

The Directive will take effect in 2026, but preparation has already begun. It offers organizations the chance not just to comply with the law, but to begin a true cultural shift.

Pay transparency is not only about who earns what. It is about trust. It is about building fair systems. It is about making equality more than a slogan. It is about not feeling unprofessional when asking the necessary and fair questions.