Whitepaper offers recommendations for transposing EU directive into national law

The EU pay transparency directive, passed in March 2023, aims to get all EU member states on the same page in providing fair pay to all workers across demographic lines.

However, the passage of the directive was not the end of the legislative process. This is because each EU nation needs to transpose the EU directive into its own country-level legislation. And there isn’t a tremendously long time for the nations to act: they are required to do so by mid-2026.

This is a tricky prospect for a few reasons. One of the biggest reasons is the need for balance, to make sure the national-level legislation has meaningful effects on fair pay—without causing too much regulatory burden for the nation’s businesses and government agencies.
Meanwhile, member states have implemented their own pay equity laws over the last several decades. This means that fair pay experts who have worked in many different European markets—experts like PayAnalytics’ own co-founder Margrét Bjarnadóttir—have been uniquely able to see what works well and what doesn’t. This firsthand experience provides the basis for informed practical recommendations.

The whitepaper: “EU Pay Transparency Directive – Transposing into national law”

With this goal in mind, Margrét recently collaborated with other experts from the insurance services company WTW and the law firm A&O Shearman to develop a whitepaper that makes recommendations for EU member states putting the directive into law.

The whitepaper’s recommendations address big questions including:

Definitions

What is the legal definition of an employer? Who is considered an employee, and what about people like agency staff and contract workers? What should the directive’s phrase “categories of workers” mean in real-world practice? Exactly what counts as pay? What elements need to be included in calculations of compensation?

Right to information

What pay period do employers use to calculate gross annual pay? How do they calculate hourly pay?

Reporting of pay gaps

What should the sample size be for categories of workers?

Overall, the whitepaper suggests specific definitions and specific methodologies that the national legislation may consider incorporating. If you are tracking the progress of the legislation to see how the global pay equity landscape will change in the next two years and how the directive will affect your organization, this whitepaper is a must-read.

You can download the whitepaper here.