Pay Transparency 2026 — New Employer Duties Under the EU Directive

Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023 on pay transparency entered into force on 6 June 2023. Member States have until 7 June 2026 to transpose it. The draft Polish act on strengthening the application of the right to equal pay is already known — and it brings concrete new duties for every employer.

What does the pay transparency directive change?

The directive aims to eliminate the gender pay gap through four mechanisms:

1. mandatory, objective pay-setting criteria,
2. the employee’s right to information about their own pay and average pay levels,
3. a prohibition on pay confidentiality clauses in employment contracts,
4. gender pay gap reporting by larger employers.

I. Objective pay-setting criteria

Every employer — regardless of headcount — will be required to define the criteria by which pay is set. Those criteria must be gender-neutral.

The act identifies four principal criteria (in line with the directive), and the employer may take others into account as well:

• skills — education, experience, qualifications,
• effort — work intensity, physical and mental demands,
• scope of responsibility — supervision of others, management of resources,
• working conditions — arduousness, environment, working hours.

II. Employee access to information on pay criteria

The employer will have to give employees access to information on the pay criteria applied — in particular in a digitally accessible form (e.g. an intranet, pay rules published online).

The end of pay secrecy

A key change is the prohibition on including pay confidentiality clauses in employment contracts. Where such a clause already exists in a contract, it will be void by operation of law. Employees will be free to discuss their earnings with one another.

III. The employee’s right to information about their own pay

At an employee’s request, the employer will be required to provide:

• the level of the employee’s pay in their position,
• average pay levels — broken down by gender — for the group of employees performing the same work or work of equal value.

If the information provided is incomplete or inaccurate, the employee may demand that it be supplemented.

The employer will be under a duty to inform employees annually — by 31 March each year — of the possibility of making such a request.

IV. Gender pay gap reporting — who is covered and what does it involve?

The duty to report pay differences applies to employers with at least 100 employees. The timetable is as follows:

What must be reported?

1. the mean gender pay gap,
2. the median pay gap — for basic pay and for variable components (bonuses, allowances, commission),
3. the proportion of women and men receiving variable components,
4. the share of women and men in each pay quartile,
5. the pay gap in each category of employees — broken down by gender, type of pay and variable components.

What if the gap is 5% or more?

If the report shows that the pay gap in any category of employees is at least 5% and is not justified by objective criteria, the employer must:

• take effective remedial action within 6 months of submitting the report,
• carry out a joint pay assessment together with the workplace trade union organisation or employee representatives.

The employer provides the results of the pay assessment to employees and to the trade union organisations.

V. Penalties for breach

The new provisions considerably strengthen the employee’s position in a pay discrimination dispute. An employee bringing a claim for damages does not have to make discrimination credible — it is enough to state that they receive lower pay than another person performing the same work. The burden of proof shifts to the employer.

Financial penalties for breaches:

• a fine of between PLN 3,000 and PLN 50,000 per offence,
• the offences covered include: failure to assess the value of job positions, failure to give access to information on pay criteria, and failure to prepare the gender pay gap report.

FAQ — the questions employers ask most

Does the duty to set pay criteria apply to small businesses? Yes. The duty to define objective, gender-neutral pay criteria will rest on every employer, regardless of headcount. The gender pay gap reporting duty, by contrast, applies only to businesses with at least 100 employees.

When must I submit my first gender pay gap report? Employers with 250 or more employees will submit their first reports from 2027 (for 2026). Employers in the 100–249 band — from 2028 (for 2027).

Will employees be allowed to talk about their pay? Yes. Pay confidentiality clauses in employment contracts will be void by operation of law. Employees will be free to disclose and compare their pay.

What if my company has a pay gap above 5%? That is not automatically a breach of the law — the gap may be justified by objective criteria (such as length of service, qualifications or performance). Where there is no such justification, however, the employer must implement remedial measures within 6 months and carry out a formal pay assessment.

What penalties apply for non-compliance? The fine ranges from PLN 3,000 to PLN 50,000 per individual offence. Quite apart from administrative penalties, employees will be able to pursue damages before the labour court more effectively — without having to make discrimination credible.

Does your company employ more than 100 people, or do you want pay rules that comply with the new directive? Contact our firm — we will help you implement the rules before they take effect.