Gender pay
transparency

In recent years, there has been an upward global trend in the implementation of new legal measures aimed at addressing pay equity. This trend continues to gather pace as more and more jurisdictions turn their focus to tackling this issue. Employers need to understand existing obligations, as well as those on the horizon, and to consider how pay equity and transparency developments impact on talent strategies.

The deadline for EU Member State implementation of the Directive has now passed. With Member States having been given three years (instead of the usual two) to implement the Directive it is anticipated that the European Commission's approach to enforcement action, against the large number of countries which have yet to comply, will be robust. Time will tell.

While some jurisdictions, such as the Czech Republic and Poland, have partially implemented the Directive (albeit in relatively small ways), only a tiny handful of countries, including Slovakia and Italy, have met the deadline for full compliance.

Countries such as France, the Netherlands and Romania have published drafts of their legislation; but others such as Germany, Austria, Belgium and Luxembourg have yet to do even that. Sweden has decided to put all implementation activity on hold for now, seeking renegotiation of the Directive's terms with the Commission.

In practice, what this means is that we are likely to see a significant flurry of activity over coming months, and employers need to be ready. There are now likely to be multiple tiers of in-force dates, impacting particularly on the deadlines for gender pay gap reports.

While private sector employers will not be subject to any obligations which have not yet come into effect in any particular country, employers who were hoping to adopt a global approach to compliance will have to consider the extent to which this is impacted.

In brief, the directive requires Member States to legislate, as a minimum, for:

• Job applicants to have the right to receive information about initial pay, or its range, with a ban on employers asking job applicants about their pay history with existing or previous employers. Employers must make easily accessible to their workers the criteria that are used to determine workers' pay, pay levels and (for employers with 50 or more employees) pay progression.
• Measures to prohibit contractual terms that restrict workers from disclosing information about their pay.
• Employers with 100 or more employees to provide information on their gender pay gap, including the proportion of female and male workers receiving complementary or variable components of pay. The timeframe for compliance, and frequency of reporting, depends on employer size.
• Joint pay assessments to be conducted where published gender pay gap information demonstrates an objectively unjustified difference in the average pay level between female and male workers of at least 5%, and the employer has not remedied this difference within six months of its pay report.
• For workers who have sustained damages to be able to obtain full, real and effective compensation or reparation. Compensation must include full recovery of back pay and related bonuses or payments in kind, compensation for lost opportunities, non-material damage, any damage caused by other relevant factors, as well as interest on arrears. Compensation must not be capped.

The UK is not required (post-Brexit) to implement the new Directive but, although once arguably ahead of the curve in terms of tackling gaps in gender pay, could now be seen as slipping behind European progress in this area.

As yet, there has been no response to the government's April 2025 call for evidence, which sought views on a range of new pay transparency proposals, including requiring employers to provide the specific salary, or salary ranges, of a job on the job advert or prior to interview; and publishing or providing employees with information on pay, pay structures and criteria for progression. The proposals also include requiring employers to provide employees with information on their pay level and how their pay compares to those doing the same role or work of equal value. These proposals bear significant similarities to the Directive, but it now remains to be seen if, and when, the government will push ahead with them.

Since April 2026, large employers have been encouraged to publish gender pay gap action plans on a voluntary basis, but they are not planned to become mandatory until Spring 2027.

Pending any UK reforms coming into force, multinational operations will have to consider how best to align their gender pay strategy in the UK with other European jurisdictions. This may well result in businesses deciding to put in place processes which actually exceed the minimum standards they are currently legally obliged to implement in the UK but which, at the same time, future-proof against potential changes on the horizon.

Other countries outside of the EU are similarly imposing obligations in relation to mandatory pay reporting and transparency.

This includes the US, where an increasing number of states and localities have passed salary transparency laws in recent years, including California; Colorado; Connecticut; Cincinnati; Delaware; Illinois; Ohio; Jersey City; New Jersey; Massachusetts; Maine; Maryland; Minnesota; Nevada; New York and New York City; Rhode Island; Vermont; and Washington. Requirements vary, challenging multi-state employers.

In New York, a bill, published in 2025, proposes to prohibit employers from asking job applicants about their expected salary, whether verbally or in writing.

Since 1 June 2025, New Jersey employers have had to disclose hourly wages or salaries, or the range of hourly wages or salaries, and a general description of benefits, in job postings.

Some states also require employer reporting. These include California, Illinois and Massachusetts.

Employers are likely to see more changes in this area, with bills pending in a number of jurisdictions. States and localities also continue to enact laws restricting the ability of employers to inquire into an applicant's salary history and/or prohibiting retaliation against an employee for discussing wages or compensation with co-workers.

In Canada, British Columbia legislation now prohibits all public and private sector employers from asking job candidates for pay history information. Employers must also post salary ranges on publicly advertised jobs. Notably, the law also requires employers who have 300 or more employees in British Columbia to publish a pay transparency report on a publicly accessible website. This threshold will reduce to 50 or more employees from 1 November 2026.

Effective 1 January 2026, Ontario employers, with 25 or more employees, have had to follow a number of requirements with respect to all publicly advertised job postings.

The requirements include providing information about the expected compensation for the position, or the range of expected compensation for the position.

In Brazil, a new Equal Pay Law took effect in July 2023, requiring all companies with more than 100 employees to publish a salary transparency report every six months. The report must provide, in anonymised form, information necessary to enable a comparison, and impartial evaluation, of remuneration criteria and of the proportion of men and women in leadership positions. The data provided must be accompanied by statistical data on other possible inequalities arising in relation to race, ethnicity, nationality and age. On 1 December 2023, a new ordinance came into force, setting out more detail on the requirements of the salary transparency reporting obligations. It confirmed that the Ministry of Labour and Employment will collect the data inserted by employers into the eSocial system and then publish their salary transparency reports each March and September on its Labour Statistics Platform.

Legal challenges have led to the delay in enforcement of the new gender equality laws. However, in May 2026, the Supreme Federal Court unanimously upheld their constitutionality and all injunctions were lifted with immediate effect.

As a result, the Ministry of Labour and Employment is now able to fully enforce the law and impose administrative sanctions for non-compliance.

In Mexico, April 2026 saw the introduction of a bill to amend the Federal Labour Law to address gender pay inequality. The proposal requires the Ministry of Labour, together with the Treasury Ministry, to implement and periodically update a system designed to detect and eliminate wage gaps between men and women.

The bill further provides for the Ministry of Labour to issue guidelines establishing wage gap indicators and the methodology to be used for their measurement. If adopted, the reforms will introduce a more structured and data-driven approach to monitoring pay equality in Mexico.

In South Africa, the Fair Pay Bill proposes to introduce structural changes aimed at increasing openness around remuneration, such as requiring salary ranges in job postings and allowing open discussion of pay among employees. The legislation also seeks to prevent salary discrimination by restricting employers from basing offers on a candidate's previous pay.

Australia has also expanded its reporting obligations. While employers with at least 100 employees have had mandatory annual pay reporting obligations for a number of years, since early 2024 employers have had to provide additional data. In addition, the Workplace Gender Equality Agency now has the power to publicly publish an employer's gender pay gap. On 27 March 2025, other new laws came into force which require employers with 500 or more employees to set three gender quality targets and make progress against them over a three year period. The targets must be reported as part of employers' 2025-2026 gender pay gap reports (ie in April/May 2026).

New Zealand has also launched a toolkit to address its gender pay gap, including a Gender Pay Gap Calculator. This is available on the Ministry of Women website. The toolkit provides a downloadable action plan and guidance materials for organisations to address and reduce pay gaps. Recent legislation also protects employees who choose to discuss what they are paid by the creation of a new form of personal grievance where an employer has 'engaged in adverse conduct for a remuneration disclosure reason'.

As we move forward, employers can expect more developments on this front and companies need to ensure that gender pay issues form an important part of their overall risk assessment strategy. In particular, the mandatory pay audits being introduced in Europe for employers with unjustified pay gaps should serve to bring the issue into sharp focus and reinforce the attention which employers need to pay to this issue. In some circumstances, employers may wish to consider conducting a preparatory audit to expose any potential issues, particularly as this can potentially be conducted in consultation with legal counsel in a manner designed to protect confidentiality and privilege to the greatest extent under applicable law.

Please reach out to any member of the DLA Piper Employment Group, or your DLA Piper relationship partner, to discuss your pay strategy further and find out how we can help.