The EU Pay Transparency Directive: What It Means for Your Business

By Emma Richmond, Managing Partner & Head of Employment Law, and Giselle Keenan, Associate, Whitney Moore

Something significant is coming for Irish employers, and the deadline is closer than many realise.

The EU Pay Transparency Directive was adopted in 2023 with one clear goal: to close the gender pay gap across Europe. Ireland has until 7 June 2026 to transpose it into national law. It will apply to businesses of all sizes, though reporting requirements will vary depending on the number of people you employ.

Whether you have a team of 10 or 500, this Directive will change how you recruit, how you communicate about pay, and how transparent you need to be with your people. Here’s what you need to know.

What counts as “pay”?

The definition is broad. Pay covers basic salary, but it also includes any other consideration, whether cash or in kind, that an employee receives directly or indirectly from their employer in connection with their employment. Think bonuses, company cars, pension contributions, share options. If it has value and it’s connected to the job, it is likely caught. As Emma Richmond explains: “Employers need to understand that this goes well beyond base salary. Any element of the package that has a monetary value is potentially in scope, and that catches more than many businesses expect.”

Recruitment is about to change

This is where many employers will feel the impact first. Under the Directive, you will need to include the starting salary, or at minimum a pay range, in your job advertisements or share it with candidates before an interview takes place. That pay range must be based on objective, gender-neutral criteria.

There is also a notable shift in how you engage with candidates: you will no longer be able to ask about their current or previous salary. Emma Richmond is clear on the rationale: “Past pay should not shape future pay, particularly where a gender pay gap may already be embedded. This provision is designed to break that cycle.” On the practical side, Giselle Keenan, Senior Associate in our Employment Law team, adds: “Many businesses still rely on salary history as a benchmark when making offers. That approach will need to be replaced with a transparent, criteria-based framework.”

Beyond this, job titles and descriptions will need to be gender-neutral, and recruitment processes must be conducted in a non-discriminatory manner. The criteria you use to determine pay, pay levels, and progression must also be made easily accessible to your workers.

New employee rights around pay information

Once the Directive is transposed into Irish law, employees will be entitled to request information about their own pay level and the average pay levels, broken down by gender, for colleagues doing the same work or work of equal value. Employers will have two months to respond.

Pay secrecy clauses will no longer be enforceable for the purpose of equal pay. Put simply, you will not be able to prevent employees from discussing or disclosing their pay in this context.

For many businesses, this represents a real cultural shift. If your pay structures are not already clear and defensible, now is the time to address that.

Gender pay gap reporting is expanding

Irish companies with 50 or more employees are already required to report on their gender pay gap. The Directive takes this further, introducing more detailed reporting categories and a phased timeline:

250+ employees: Annual reporting from 7 June 2027
150 to 249 employees: First report by 7 June 2027, then every three years
100 to 149 employees: First report by 7 June 2031, then every three years

Ireland will also have the option to extend reporting requirements to employers with fewer than 100 workers. We are watching closely to see how this is addressed in the national legislation.

One point worth noting: under the Directive, if an employee claims you have not met your obligations, the burden of proof sits with you as the employer. Emma Richmond sees this as one of the most significant aspects of the Directive: “The reversal of the burden of proof changes the landscape entirely. It means employers will need to demonstrate that their pay practices are fair, rather than relying on an employee to prove otherwise. That requires robust documentation and clear, objective pay criteria.”

Joint pay assessments: when the 5% threshold applies

Where your gender pay gap reporting reveals an average pay difference of 5% or more between male and female employees in any category of workers, and that gap cannot be justified on objective, gender-neutral grounds, and you have not remedied it within six months of the report, you will be required to carry out a Joint Pay Assessment.

This is not a box-ticking exercise. It is a detailed review of your pay structures, carried out in cooperation with worker representatives. As Giselle Keenan explains: “Employers should not wait until a 5% gap triggers a formal assessment. Running an internal pay audit now, while there is no statutory pressure, gives you the time and space to identify and address any issues on your own terms.”

Penalties

The Directive provides for compensation to affected employees, along with fines for non-compliant employers. The specifics will depend on how Ireland transposes the rules, but the direction of travel is clear: this will have teeth.

What should you be doing now?

Even though the transposition deadline is not until June 2026, the groundwork takes time. Here are some practical starting points:

Map out your workforce. Identify who is doing the same work, or work of equal value.
Review your pay structures and check they are based on objective, transparent criteria.
Audit your recruitment processes, including job advertisements and interview practices.
Brief your HR team on the new requirements, particularly around candidate salary history.
Prepare to respond to pay information requests from employees within the two-month window.

Getting ahead of this

The Directive is not solely about compliance. As Emma Richmond puts it: “This is an opportunity to build trust with your team and strengthen how people see you as an employer. The businesses that prepare early will be in a far stronger position than those left scrambling at the last minute.”

If you have questions about how the Pay Transparency Directive will affect your business, the Employment Law team at Whitney Moore would be glad to help. You can reach Emma at emma.richmond@whitneymoore.ie or Giselle at giselle.keenan@whitneymoore.ie.

This article is for general information purposes only and does not constitute legal advice. For advice specific to your circumstances, please contact us directly.