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Pay transparency has become one of the key priorities of the European Union’s gender equality agenda. As part of the EU Gender Equality Strategy 2020–2025, the European Commission proposed binding pay transparency measures on 4 March 2021. Following political agreement between the European Parliament and the Council, Directive (EU) 2023/970 on pay transparency was formally adopted in 2023.
The Directive aims to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and reinforced enforcement mechanisms. It entered into force in June 2023, and EU Member States are required to transpose it into national law by 7 June 2026.
As the transposition deadline approaches, companies operating in the EU should prepare for significant changes in recruitment, compensation management, internal reporting, employee information rights, and potential litigation exposure. |
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