Draft legislation published to implement the Gender Pay Transparency Directive

At a glance

• A draft bill has been published which will amend the Labour Code and other statutes to implement the Gender Pay Transparency Directive (Directive).
• However, the bill has not yet been submitted to Parliament and a number of implementing decrees are yet to be drafted.
• The final legislation is expected to be in force from 1 January 2027, more than six months after the formal Directive deadline. However, many key provisions including those relating to employee pay information requests, pay gap reporting of pay differences within work levels, and pay assessments are scheduled to come into force even later, on 1 January 2028.
• The draft legislation broadly reflects the requirements under the Directive but there are some deviations.

The draft legislation implementing the Directive includes the following provisions:

Pay information for job applicants (1 January 2027)

• Employers must provide job applicants with information about the minimum amount of salary, and any other payments or emoluments of monetary value to which they would be entitled as an employee, no later than before the commencement of negotiations on the conclusion of the employment contract.
• Employers do not, therefore, necessarily need to include pay information in job advertisements.

Employees' right to pay information (1 January 2028)

• Upon written request by an employee, employers must provide the employee with information on the amount of their remuneration (and other monetary benefits and benefits of monetary value), and on the average amounts of remuneration and benefits, if any, within their relevant work level (see below), broken down by gender.
• The total of these payments must be assessed in gross annual terms for the previous calendar year with the corresponding gross hourly rate.
• The information must be provided within two months of the employee's request.
• The employer may prohibit the employee from using the information  obtained for any purpose other than the exercise of their right to equal treatment in the provision of remuneration for work and other monetary benefits and benefits of monetary value.
• If the provision of information would lead to disclosure of pay information of another individual employee, the employer must instead fulfil its obligations by providing the requested data to the Public Defender of Rights.
• The Ministry of Labour and Social Affairs (Ministry) will set out, by decree, the method for calculating the amount of remuneration for work and other monetary  benefits and  benefits of monetary value.

Pay systems (1 January 2027)

• All employers must establish a remuneration system which sets out the manner in which employees are remunerated, and includes details of how the amount of remuneration is graded.
• The remuneration system must classify all types of work into levels according to the value of the work, based on its complexity, responsibility and physical exertion. Unlike the Directive, which allows other factors to be taken into account where appropriate, there is no scope for employers to include additional evaluation criteria in this classification.
• Employers who provide employee benefits in addition to remuneration for work must also establish a system for the provision of other monetary benefits and benefits of monetary value. This system must be based on objective and non-discriminatory criteria and incorporated in an internal policy or a collective agreement. 

Gender pay gap reporting (1 January 2028; 1 January 2031)

• The Ministry will determine employer size (as at 1 January for the entire preceding calendar year) and prepare each employer's headline pay gap report using data from monthly payroll figures. By 28 February, the Ministry will inform employers if their size makes them eligible for pay gap reporting.
• However, separately, employers will be required to submit a further report on pay gaps within individual work levels and submit this by 30 April each year. The report must also be provided to any trade unions or works councils operating at the employer’s premises.
• Gender pay gap data must be reported annually for employers with 250 or more employees, and three-yearly for employers with 150 – 249 employees. The first reports must be produced by 30 April 2028.
• From 2031, the three-yearly reporting obligation will also apply to employers with 100 – 149 employees. These employers may request voluntary pay gap reporting in 2028. 

Pay assessments (1 January 2028)

• Employers subject to reporting obligations will be required to carry out a pay assessment if there is an unjustified pay gap of at least 5% which is not remedied within six months of the pay gap report.
• A pay assessment must be carried out within two months of the expiry of the six-month rectification period.
• Employers must consult about the pay assessment with any operative trade unions or works councils. Where there is no trade union or works council, employers can carry out the assessment without consultation subject to following a notification to the employees and a prescribed process.
• If a pay assessment discloses information about the remuneration of a specific employee, employers must state this in the assessment, and not disclose the information to employees.
• Employers must take measures to eliminate unjustified differences in pay and may request an opinion from the Public Defender of Rights on the implementation of measures resulting from the pay assessment.

Enforcement

• The Public Defender of Rights will act as the designated equality ombudsman and, for example, will handle individual pay data requests where disclosure would enable identification of individual employees.
• There will be new administrative offences for employers failing to comply with their pay transparency obligations.
• New procedural rules (reverse burden of proof) will apply to new cases brought to court after 1 January 2027.