Pay Transparency,
what changes for employers
The long-awaited pay transparency has become a reality in 2026. It is more than a regulatory requirement; it is a real social security and strategic challenge for businesses that must rethink their compensation policies. But what does this idea entail? What is its impact? How to prepare for it effectively?
In this analysis, Adrien Billaux, labor lawyer at Primexis, deciphers the impact of the European directive and French bill to help employers anticipate and implement the required measures.
A European initiative for pay equity
The European Union enshrines the right to equal treatment (Article 157 of the Treaty on the Functioning of the European Union, 1992) and incorporates it into its 2020-2025 strategy. However, pay gaps remain:
- Europe: 13% average pay gap between women and men in the same position (2025)
- France: 4% gap (2025)
To address this, the European Parliament and the Council adopted Directive (EU) 2023/970, known as the “Pay Transparency Directive,” aimed at eliminating inequalities at the source.
The three pillars of the directive
The directive has three main areas:
Equal pay for equal work
Ensure the right to equal pay
and empower employees to exercise that right
Use transparency to reduce
unmeasured pay gaps
The concrete measures to remember:
- Transparency at hiring
- A compensation policy based on objective and non-discriminatory criteria
- The right to information on one’s pay and average pay by sex for equal positions
- Creation of a pay gap index
- Joint evaluation of compensation with employee representatives in the event of unjustified gaps
A deadline not to be missed
The directive must be written into French law through a specific law by June 7, 2026, at the latest. Failure to comply by this date, the French State could face financial penalties and legal actions before the Court of Justice of the European Union, which may be initiated by employees.
Given the deadlines and legislative schedule, the government has already announced a delay with a final law expected after the summer of 2026
Information/Misinformation
The directive is circulating widely on social media, but some misconceptions remain. These include the belief that employees will be able to find out their colleagues’ exact salaries by accessing their pay slips or that companies are deliberately hiding massive pay disparities.
Advice for companies: communicate clearly and transparently, taking the time to explain things thoroughly to prepare employees and avoid misunderstandings.
The perception in France
Surveys of HR directors and employees have revealed mixed perceptions:
- Most HR directors and employees believe it to be a tool for reducing pay gaps for equivalent positions. Employees believe that their commitment would not necessarily be affected by pay transparency
- A relative majority of employees and HR directors see transparency not as a constraint but as a step towards greater equity
- Many employees view the reform negatively at first and feel they are not compensated fairly. HR directors, for their part, are concerned with the risk of tension among employees and the exposure of past issues, which could damage the company’s image
The bill under negotiation
On March 6, a draft bill was introduced to social partners. It provides for:
- Gender equality index reform
- Requirement to include new information in job offers
- Establishment of a right to information for employees and a definition of the idea of “equal value”
- Ban of pay secrecy clauses
- Penalties of up to 1% of total payroll in the event of unjustified discrepancies
Please note: at this time, these measures are simply a draft bill to be adopted definitively. They have not come into force.
How to prepare your company?
To anticipate the law coming into force and to limit social risks, multiple actions can be executed:
Diagnose
- Carry out an internal audit on pay equity
- Identify and raise awareness of gaps
- Review Gender Equality Index
Structure and adapt
- Determine categories of employees and review job descriptions
- Formalize compensation criteria using pay scales (benchmarks)
Adapt HR processes
- Review the recruitment process and relationships with service providers
- Inform and train managers
- Anticipate controls and publication requirements
Inform and support employees
- Be prepared to address employees’ concerns
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Need assistance?
Do these new obligations impact you? Would you like to anticipate this transposition into law and secure your HR practices?
Our Payroll & HR Advisory team can assist you in ensuring the compliance of your employee policies and ensuring transparency with your employees.
