EU Pay Transparency Directive – a guide for employers in Ireland

The European Parliament adopted the new EU Pay Transparency Directive in March 2023. Member states are expected to comply by June 2026.

At its core, the Directive is designed to close the gender pay gap among EU workers. So, you’ll have to change the way you structure, communicate, and report on pay. 

The impact on business owners in Ireland will be significant, and individual states will set penalties for non-compliance. It may sound like a lot of work, but there are benefits to pay equity and transparency.

Although Ireland has not yet published legislation to transpose the requirements of the Directive, you should start to prepare and analyse information now. 

Key facts about the EU Pay Transparency Directive

The Directive applies to all workers across public and private sectors, including part-time, fixed-term contract and those with a contract of employment with an employer or agency. It’ll cover job applicants too.

Key principles (and how you’ll need to act):

Recruitment and interviewing

• You’ll have to disclose pay levels and ranges in job advertisements or before the interview stage

• You’ll have to provide information to applicants that will enable transparent pay negotiations

• You will not able to ask about an applicant’s pay history

• Job advertisements and recruitment processes must use gender-neutral language and avoid discrimination at every stage

Pay setting and progression

Employees must be able to easily access information about the criteria used for determining pay, pay levels and pay progression.

Pay progression transparency is expected to apply to organisations that employ more than 50 workers—keep an eye out for more details.

Transparency and the right to information

If an employee asks, you must provide written information showing how their pay compares with the average. You have two months to respond.

You’ll need to break the information down relating to sex and categories of workers doing the same work as them or work of equal value.

Every year, you need to inform workers of their right to request pay information.

You won’t be able to stop employees discussing or disclosing their pay to others.

Joint pay assessments and Gender Pay Gap Reports

Businesses with over 50 employees will have to report on their gender pay gap every year.

If your Gender Pay Gap Report shows a gap of 5% or more in any category of employee, you’ll have to justify it by objective and gender-neutral factors, or remedy it within six months. If you don’t justify or remedy it, joint pay assessments will need to be prepared.

If you employ 50 or more employees, you need to seek expert guidance.

How you can prepare for the EU Pay Transparency Directive now

• Start by reviewing your current pay levels, including basic pay, bonuses, benefits, and overtime

• Audit your recruitment practices to ensure compliance

• Look at policies and procedures and establish robust and transparent pay practices

• Start collecting pay data and prepare for increased reporting

• Train managers about their responsibilities and inform employees of their rights

• Review policies and procedures for recruitment, pay-setting and progression, and data requests

• Monitor legislative developments

• Examine current job description templates to ensure that there is objective, gender-neutral criteria in place

• Consider an HR software that will ensure compliance and offer employment law advice in case of queries

Why should employers comply with the EU Pay Transparency Directive?

Victims of pay discrimination will receive compensation, and there is provision for penalties, including fines, for employers who breach the Transparency Directive. Where the burden of proof was once on the employee, the employer must now prove they’ve not violated the rules. So, record keeping and read receipts will be more important than ever.

How BrightHR can help

Check out our webcast series for employment law updates. Looking for specific advice on employment law? You can call our 24/7 helpline for expert advice without costly legal fees. And you can also access the cloud-based document library for template contracts, policies, and procedures. Once you’ve got your documentation, you can store the documents confidentially, and confirm key updates with staff alerts and read receipts.

Questions about upcoming legal changes? Book a demo with one of our employment law experts.