What the EU Directive Means for The Netherlands, Germany, Spain, and France in 2026.
The European Union has taken a decisive step to address persistent pay inequality by introducing the Pay Transparency Directive (EU) 2023/970. This landmark legislation aims to combat pay discrimination and close the gender pay gap (which stood at approximately 12.7% on average across the EU in 2021) by empowering employees with information and compelling employers to take action.
The Directive officially came into force in June 2023, and Member States have until June 7, 2026, to transpose its requirements into national law. While some countries are on track to meet this, the path to implementation varies significantly across Europe.
As specialists in international recruitment, Go Ahead HiRe helps global businesses navigate this complex landscape. Here is how the Directive will impact the Netherlands, Germany, Spain, and France. Please contact us in case of a question about another country in Europe.
The History and Core Principles of the Directive
The push for pay transparency has been ongoing in the EU for some time, with previous non-binding recommendations. The 2023 Directive introduced binding measures, focusing on minimum standards to strengthen equal pay compliance:
- Right to Information: Employees gain the right to request information about their individual pay level and the average pay levels for colleagues doing the same work or work of equal value.
- Pre-Employment Transparency: Employers must provide salary ranges in job advertisements or before the interview stage. They are also banned from asking job applicants about their salary history.
- Gender Pay Gap Reporting: Employers with 100 or more employees will face mandatory reporting obligations on their gender pay gap, with specific frequency determined by company size.
- Joint Pay Assessments: If an unjustified pay gap of 5% or more is identified in the reports, employers must conduct a joint pay assessment with worker representatives.
- Burden of Proof Shift: In legal cases, if an employee establishes a prima facie case of pay discrimination, the burden of proof shifts to the employer to prove their pay practices are non-discriminatory.
Implementation Plans: Netherlands, Germany, Spain, and France
The way countries implement the Directive into their national frameworks differs, as the Directive sets minimum standards that allow for some national interpretation (“gold-plating”).
The Netherlands: A Confirmed Delay
The Netherlands has a strong culture of equal pay in principle, but currently lacks mandatory public reporting. The implementation of the EU Directive has faced delays.
- Timeline: The Dutch government has officially confirmed it will miss the June 2026 EU deadline. The new target date for the Dutch implementing law is no later than January 1, 2027.
- Employer Obligations: Reporting obligations for employers with 150+ employees are postponed, with the first report covering 2027 data and due in 2028.
- Key Fact: Despite the delay, from June 7, 2026, the principle of the Directive could still have “direct effect,” meaning employees might be able to invoke the EU law directly in court even if national law isn’t ready.
Germany: Expanding on Existing Laws
Germany already has a national pay transparency law (Entgelttransparenzgesetz or EntgTranspG) since 2017, but it is less stringent than the new EU Directive.
- Timeline: Germany is working to meet the June 2026 deadline. The national law needs substantial revision to align with EU requirements.
- Employer Obligations: The current law primarily relies on employee information requests and covers large companies. The new law will require salary ranges in job ads, expand mandatory reporting to all firms with 100+ employees (not just 500+), and introduce stricter sanctions for non-compliance.
- Key Fact: Germany’s existing framework already places the burden of proof on the employer once a pay gap is shown, aligning with a key aspect of the Directive.
Spain: Aligning Existing Regulations
Spain is ahead of the curve, with comprehensive pay equity laws already in place since 2019-2020, including mandatory pay registers (registro retributivo) for all companies and pay audits/equality plans for those with 50+ employees.
- Timeline: Spain is well-positioned to meet the June 2026 deadline. The national law needs alignment with the stricter requirements of the EU Directive.
- Employer Obligations: The current 25% gap reporting trigger will be lowered to the EU’s 5% threshold. Requirements like salary range disclosure in job postings, currently in place in Spain, will be formalized under the new Directive.
- Key Fact: Spain already has a robust enforcement mechanism through its Labor Inspectorate, including fines for non-compliance with the registro retributivo and equality plans.
France: Evolving the “Index de l’Égalité”
France also has an existing system, the “Professional Equality Index” (Index de l’égalité professionnelle), which is mandatory for companies with 50 or more employees and results in a public score out of 100.
- Timeline: France must also meet the June 2026 deadline, requiring adjustments to the existing Index to align with the Directive’s requirements. The government plans to introduce a bill for this purpose.
- Employer Obligations: The current 7-indicator index will see adjustments. New requirements from the EU Directive not fully covered by the Index include explicit salary range disclosure in job postings and a ban on salary history inquiries.
- Key Fact: The existing French system already uses a scoring mechanism that can result in financial penalties for companies scoring below 75 points, putting significant pressure on employers to manage pay equity effectively.
How Go Ahead HiRe can help:
The shift towards greater pay transparency is a global trend. For international organizations, navigating these varying compliance requirements requires a specialist approach to recruitment and talent management.
At Go Ahead HiRe, we stay current with all employment law changes across Europe. We ensure your hiring practices are compliant with the latest regulations, from pre-employment transparency in Germany to managing the reporting delays in the Netherlands.
Contact us today to discuss your international recruitment needs and ensure your business is ready for the new era of pay transparency.
