Transparency obligations
These obligations apply to all employers, regardless of the size of the organization, and to both public and private sector entities. The following requirements are being introduced:
- Employers must inform job seekers about the starting salary or pay scale and relevant collective labor agreement provisions in the job posting or before the interview.
- Employers cannot inquire about previous salaries.
- Employers must ensure job postings and recruitment processes are gender-neutral and non-discriminatory.
- Employees have the right to information about the pay policy and its development.
- Employees can request written information about their individual pay level and the average pay levels, broken down by gender, for similar roles. Employers must provide this information within two months of the request.
Reporting obligations
Starting in 2026, employers with 100 or more employees must report on the gender pay gap within their organization. The gender pay gap refers to wage disparities for equal or equivalent work. The reports must include:
- The pay gap
- The pay gap in additional or variable components
- The average pay gap
- The average pay gap in additional or variable components
- The proportion of female and male employees receiving additional or variable components
- The proportion of female and male employees in each quartile pay scale
- The employee pay gap, split by categories of employees and by base pay and additional or variable components
The Ministry of Social Affairs and Employment will assist employers in submitting the report by providing detailed regulations regarding the data to be reported and the manner in which it should be submitted. Efforts will be made to implement a user-friendly system, utilizing automated data collection where feasible. If reported pay gaps exceed 5%, employers are required to conduct thorough pay evaluations. The Labor Inspectorate is responsible for supervision and enforcement, and employers who violate the rules can expect fines of up to EUR 10,300 per violation.
Reporting frequency
The frequency of reporting depends on the number of employees:
- 100-149 employees: every 3 years, with the first report due by 7 June 2031
- 150-249 employees: every 3 years, with the first report due by 7 June 2027
- 250 or more employees: annually, with the first report due by 7 June 2027
However, a wage gap does not necessarily imply an unjustified pay difference between men and women. Objective factors can account for allowed differences in wages, including:
- Skills
- Effort
- Responsibilities
- Working conditions
Employers are responsible for establishing criteria based on at least these four factors and incorporating them into wage structures. The Works Council's consent rights will be expanded to include decisions on gender-neutral criteria for the company's wage structure and remuneration evaluations if a wage gap of more than 5% is reported between male and female employees.
As the deadlines are fast approaching, we recommend our clients begin establishing their pay structures promptly. This includes reviewing current pay policies, ensuring compliance with the new transparency and reporting obligations, and preparing for potential evaluations and adjustments to address any identified pay gaps. We are happy to be of assistance.
