Pay transparency directive - what it means for businesses

Three weeks from today there is a deadline of 7 June for implementation of the EU Pay Transparency Directive for member states.

The directive aims to combat pay discrimination by enhancing pay transparency and information rights for job seekers.

New data from Indeed shows that just 39% of Irish job postings feature salary information as of March 2026, up 3% from the same period last year.

The data highlights that Ireland's inclusion of salary information is behind the UK (56%), the Netherlands (48%) and France (43%) though ahead of several large EU economies such as Germany (12%) and Spain (17%).

The directive also aims to help close the gender pay gap in the EU and improve access to redress for workers who allege gender-based pay discrimination.

Indeed’s research found that across Europe, around three in four women said they should be more likely to apply to a job if the salary was stated and believe job postings should include salary ranges as standard, compared to roughly two in three men.

According to Indeed, this underpins the argument that transparency could help reduce gender disparities in application behaviour.

For this directive to be implemented we first need to see Irish legislation.

And secondly, the directive requires member states like Ireland to put in place guidance to support employers as they work their way through the requirements.

As of today, there is no draft legislation or guidance for employers, so Ireland will miss the deadline for the implementation of that directive.

In a letter seen by RTÉ, ISME has highlighted its concerns to Minister for Children, Disability and Equality Norma Foley.

It is asking for more time, and a path to transition that acknowledges the work already done by Ireland in driving pay equality and transparency since the enactment of Gender Pay Gap Information Act 2021 (the Act).

The association said one of the biggest challenges for employers, particularly SMEs in their view, will be comparing jobs of "equal value".

What exactly is the EU Pay Transparency Directive?

The EU Pay Transparency Directive was approved in June 2023.

It's due to be implemented into national law by EU Member States by 7 June, 2026.

It is legislation that aims to put in place a process by which employees in a business can get access to transparent data concerning the way their employer structures pay and promotion processes.

Essentially, the directive looks at ensuring men and women are paid equally for comparable work.

It starts with the recruitment process, including salary range disclosure and the provision that an employer cannot ask an employee for details of their previous earnings.

This is followed by employers having full pay transparency; this also relates to promotion, any discretionary benefits, and how pay is set across the business.

There is also a requirement for gender pay gap reporting.

Gender pay gap reporting obligations already exist in Ireland since 2021, while last June the threshold for reporting was lowered to employers with 50+ employees.

The directive also introduces enforcement mechanisms, so an employer can be held accountable, meaning it is the employers’ responsibility to justify any pay differences.

The penalties, decided by each individual state are expected to be effective, proportionate, and serve as a deterrent.

This legislation relates to gender and doesn't currently provide the same rights to access data on other grounds such as disability, age or other equality grounds, according to Maura Connolly, Partner and Head of Employment at Addleshaw Goddard Ireland.

"The very first thing we think employers are going to start having to be aware of and put in place is a neutral recruitment process and be transparent at the outset as to the pay ranges for that job," she said.

What’s 'new' about this directive?

The concept of paying people equally when they're doing the same or a similar job is not new in Ireland.

Irish law has recognised equality of pay and the concept of equal pay for equal work since the 1970s.

There was legislation in 1974 relating to equality of pay, and more generally legislation in 1977 relating to equality of treatment.

But what is new under this directive is that it's going to provide employees and their representatives with a much more effective means of finding out about how their employer goes about structuring pay within the organization.

"Where previously an employee might have had the right to bring a claim saying that they believed that they were being paid differently than a person who was doing a similar or comparable job, they didn't have access to any data about that," explained Ms Connolly.

"What this directive is going to do is actually provide employees with a real means of seeking information about the pay structures within their organisation," she said.

"The intention behind that is to allow for employees to have that data, which will then support them in any pay claims that they may wish to bring."

Is Ireland ready to implement legislation for the EU deadline?

The directive sets out minimum levels of compliance, this means individual member states need to set out their own detailed implementation.

Many member states have yet to publish their legislation that will implement the Directive, including Ireland, therefore missing the June deadline.

The Pay Transparency Bill has not been included in the Priority List for the Government’s Summer Legislative Programme.

This indicates there will likely be a significant delay in the transposition of the Pay Transparency Directive.

A spokesperson for the Department of Children, Disability and Equality said officials have been working towards the 7 June deadline for implementation.

However, they said several factors have impacted on this work, including the delay in finalising Commission guidance, particularly the dedicated Irish Employer Gender-Neutral Job Evaluation toolkit which was only published at the end of March 2026.

The spokesperson said the department will work with employers, employees and their representatives in the implementation of the Directive, which will be on a phased basis once the passage of the legislation is complete.

Business group Ibec has called for confirmation that the transposition of the directive will be delayed.

While it acknowledges the difficulties the department faces, and welcomes its continued engagement on this matter, Ibec said that in the absence of required detail in the form of transposing legislation, tools, and methodologies for job categorisation, it is very difficult for employers to prepare.

Head of Employment Law Services at Ibec Nichola Harkin said they are becoming increasingly concerned that costly mistakes may be made by employers in their good-faith efforts to comply given the lack of legislative guidance on many key provisions.

"At the very least, employers must be given confirmation that provisions beyond the pre-employment transparency obligations will not become law until 7 June 2027 at the earliest," said Ms Harkin.

"This will ensure that high-quality, legally robust national legislation can be prioritised over a rushed transposition that ignores the inherent complexity of the requirements," she added.

What are the main concerns for companies?

"It's just not good enough that we don't have guidance at this stage," expressed HRLocker CEO Crystel Robbins Rynne.

There are roughly 400,000 SMEs in Ireland, making up 99.8% of all businesses.

It found only 14% strongly understand the directive, while 70% say legal compliance is their single biggest worry.

The department spokesperson said employers will not be penalised for not having all elements of directive completed in June 2026.

Despite Ireland missing the deadline, the directive will still come into play from an EU perspective.

"The main concern is the unknown of what is expected from Irish employers at this stage," said Ms Robbins Rynne.

"Employers still need to have an understanding of what will be expected from a base level."

She compared the discussion around this to discussions around to auto enrolment and flexible working.

"We know these things are coming down the track, but they keep getting put off and off and off.

"It is just a case of either stop the panic and (for government to) tell employers you don't need to worry about this for 12 months.

"But at a basic level, this is what you should be putting in, or something, just a bit of guidance as what employers would require.

She warned the lack of guidance on compliance could also be damaging for employer-employee relationships.

"The employer should be able to provide evidence on how pay was set, that it was objective, that it was gender neutral, that those pay ranges and that progression scale actually exists," outlined Ms Robbins Rynne.

"I think for employers to turn around in the middle of June to say, well, we don't actually have that for you isn't a great look from an employer to employee perspective."

How long will it take companies to implement legally compliant structures?

According to Ms Robbins Rynne; "how long is a piece of string?"

She said a company’s system can be as complicated or as intricate as they want it to be.

At a basic level they will have to look at how the company was set up.

The employer will need to put in a framework that shows how an employee’s wages were decided.

If, for example, this highlights a significant difference in people’s salaries for comparable work because someone negotiated a higher salary, they will have to be able to account for that.

"There are going to be some difficult decisions as a company, and they won’t be able to hide away from it, so there will be a bit of work in it," said Ms Robbins Rynne.

What advice do the experts have for companies.

Addleshaw Goddard’s Maura Connolly has two key pieces of 'day one’ advice that can be carried out immediately.

Step one is to look at the recruitment stage and pay transparency for job seekers.

She recommends clients to look at the processes, the interview templates, structures for recruiting and train managers not to ask about historical pay.

Step two is to carry out an audit of their workplace and effectively look at how they have set pay and conditions within the business.

Using the information from the wording of the Directive and European Commission guidance, she thinks these practical steps will help employers prepare ahead of the Directive.

While Ms Robbins Rynne is offering three areas to focus on, and it's all about changing the process.

Recruitment transparency; she advises adding the salary bands in every job posting and stop asking candidates about their pay history.

Start looking at your basic pay structure: Ms Robbins Rynne suggests writing down objective criteria that determines the pay for each role basing it around skills, responsibility, experience, and performance.

Finally look at a performance management framework: document the level or grade a person starts on and how they can move through the company, and you have the documentation to support that if an employee asks how they can progress.