Origins of Directive 2023/970
Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023 on strengthening the application of the principle of equal pay for equal work or work of equal value between men and women was published in the Official Journal of the EU on May 17, 2023.
This is a groundbreaking legal act aimed at more effectively enforcing the principle of equal pay enshrined in EU Treaties since 1957.
Scope of Application
The directive covers:
- All employers in the public and private sectors
- All employees under employment contracts
- In some cases, also job applicants
Key Definitions
Remuneration
Includes not only basic salary but also all other components of compensation – bonuses, allowances, benefits in kind, awards, and other benefits.
Work of Equal Value
Work considered equivalent based on objective, gender-neutral criteria: skills, effort, responsibility, and working conditions.
Pay Gap
The difference between average pay levels of female and male workers, expressed as a percentage of male workers’ average pay.
Main Requirements of the Directive
For Employers with 100+ Employees
| Number of Employees | Reporting Frequency |
|---|---|
| 250+ | Annually |
| 150-249 | Every 3 years |
| 100-149 | Every 3 years (from 2031) |
Information Obligations
- Before employment – providing salary ranges
- During employment – information about average salaries
- Upon request – detailed pay data for comparison group
Enforcement Mechanisms
- Reversed burden of proof – the employer must prove they did not discriminate
- Compensation – full reparation for damages, including back pay
- Penalties – effective, proportionate, and dissuasive sanctions
- Protection against retaliation – protection for employees reporting violations
Implementation Timeline
- June 7, 2026 – deadline for transposition into national law
- June 7, 2027 – first reports from companies with 250+ employees
- June 7, 2031 – companies with 100-149 employees included
What Should Your Company Do Now?
- Current situation audit – review of pay structure
- Pay gap analysis – identification of risk areas
- Job description review – objective valuation criteria
- System preparation – tools for reporting and monitoring
- Training – education for management and HR
Directive 2023/970 is not just a new legal obligation but also an opportunity to build a fairer and more attractive workplace.
More on practical implementation aspects in the following articles in this series.
Read Also
- ‘Equal pay and EU directive on pay transparency’
- Gender Pay Equality – Why Does the Pay Gap Still Exist?
- ‘Payroll disclosure and the EU directive: a guide for companies’
Read also
- Gender Pay Equality – Why Does the Pay Gap Still Exist?
- Equal pay and EU directive on pay transparency
- Transposition of Directive 2023/970 into National Law – What Awaits Us by June 2026?
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Frequently Asked Questions
What is EU Directive 2023/970 and when does it take effect?
Directive 2023/970 strengthens the principle of equal pay for equal work or work of equal value between men and women. EU member states must transpose it into national law by June 7, 2026. It introduces mandatory pay transparency measures, reporting obligations, and enforcement mechanisms that will significantly impact how organizations manage compensation.
Which companies are affected by the new pay transparency requirements?
All employers in EU member states will be affected, though reporting obligations scale with company size. Organizations with 100+ employees will face the most extensive requirements, including regular gender pay gap reporting. Smaller companies must still comply with transparency rules around job postings, salary information rights, and non-discrimination in pay structures.
What are the key obligations for employers under Directive 2023/970?
Employers must provide pay transparency in job postings (salary ranges), give employees the right to request pay information for comparable roles, conduct regular pay gap assessments, and take corrective action if gaps exceed 5%. They must also ensure pay structures are based on objective, gender-neutral criteria and maintain accessible pay classification systems.
How should companies prepare for the directive’s implementation?
Start by conducting an internal pay audit to identify existing gender pay gaps and their root causes. Review and update job evaluation and classification systems to ensure they use objective criteria. Establish transparent salary bands for all positions, train HR and management on the new requirements, and implement reporting processes well before the June 2026 deadline.