EU Employers Will Soon Have to Include Salaries in Job Ads

From June 2026, the European Union will introduce a directive that requires employers to disclose salaries in job advertisements.

The EU Pay Transparency Directive (Directive 2023/970) aims to ensure equal pay for equal work or work of equal value, promoting fairness across genders, non-binary, and other protected groups. This move marks a significant shift in hiring practices, emphasizing transparency and equity in the workplace.

Why the Change Is Needed Despite decades of progress, women in the EU still earn approximately 12.7% less per hour than men. The disparity is even greater in some countries, with Germany at 19%, the Netherlands at 18.7%, Ireland at 17.6%, and Italy at 15.4%. By mandating salary disclosure, the directive seeks to reduce these gaps, increase fairness, and build trust between employers and candidates.

What Employers Must Do Under the directive, companies must provide either a salary range in job ads or communicate the salary before the first interview. Employers are also prohibited from asking candidates about their current or past salaries, ensuring that offers are based on the role and its responsibilities, rather than prior earnings.

Employees gain new rights as well. They can request information on average pay for comparable roles and understand how pay and progression decisions are made. Confidentiality clauses that prevent salary discussions are no longer allowed, empowering employees to advocate for equitable pay.

Reporting and Accountability Companies will be required to report gender pay gaps based on their size. Organizations with 250 or more employees must report annually, those with 100–249 employees every three years, and smaller companies are generally exempt unless national law dictates otherwise. Unexplained gender pay gaps above 5% trigger joint assessments and corrective action, with sanctions or fines applicable for non-compliance.

Challenges and HR Strategy Executives have expressed concerns that pay transparency may expose sensitive salary information, compress pay ranges, and increase employee expectations. Human resources leaders will need to redesign pay frameworks using objective, data-driven criteria, ensure decisions are well documented, and train managers to communicate pay structures effectively. Clear communication of the company’s pay philosophy will be essential to maintaining trust. Cultural Impact Transparency is expected to foster trust, fairness, and inclusion, but its success will depend on clear policies and communication. By embedding these principles into hiring and HR processes, companies can promote open dialogue and create a culture of accountability.

Timeline and Implementation The directive was adopted on 10 May 2023 and published in the EU Official Journal on 17 May 2023. Member States are required to transpose the directive into national law by 7 June 2026. Compliance will vary slightly by country, but the overarching goal is the same: salary transparency that drives equality and accountability across Europe. Looking Ahead The EU Pay Transparency Directive represents a cultural and structural shift in how workplaces operate. By requiring salary transparency, it not only reduces gender pay gaps but also ensures that candidates and employees are treated fairly. For employers, it is a call to prepare HR systems, rethink pay structures, and communicate openly with their workforce. For employees, it is an empowering step toward equal pay and workplace equity.

Source European Commission, 'The gender pay gap situation in the EU.’

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