Legal Flash no. 126
Legal Flash no. 126
Pay Transparency Directive
The EU Directive (EU) 2023/970 establishes measures aimed at ensuring equal pay for equal work or work of equal value between women and men, by increasing pay transparency at all stages of the employment relationship.
According to the Directive, Member States must transpose it by 7 June 2026.
The main elements introduced by the Directive are:
Employers’ obligations
1. Transparency in recruitment
2. Transparency of pay structures during employment
3. Reporting pay gaps
If the reporting reveals a pay gap of at least 5% between women and men in a category of positions, and it cannot be justified through objective and gender‑neutral criteria, the employer must conduct a joint pay assessment together with employee representatives. This may involve revising job evaluation criteria, salary grids, or other internal organisational adjustments intended to eliminate the imbalances.
4. Prohibition of pay confidentiality
5. Practical implications for employers
Romania is currently in the preliminary stage of transposing the Directive, as no draft legislation has yet been published for consultation.
The national framework already enshrines the principle of equal remuneration (Law no. 202/2002; Government Ordinance no. 137/2000), but it does not provide operational tools comparable to those required by the Directive. Moreover, Article 163 of the Labour Code, which regulates salary confidentiality, is in direct contradiction with the Directive’s pay transparency requirements.
In this context, transposing the Directive will require amending these domestic provisions, as well as introducing clear and detailed mechanisms regarding pay transparency and pay gap reporting.
The EU Directive (EU) 2023/970 establishes measures aimed at ensuring equal pay for equal work or work of equal value between women and men, by increasing pay transparency at all stages of the employment relationship.
According to the Directive, Member States must transpose it by 7 June 2026.
The main elements introduced by the Directive are:
- the establishment of clear pay transparency requirements in recruitment and throughout the employment relationship;
- mandatory periodic reporting of pay gaps between women and men for employers with at least 100 employees;
- the introduction of a joint pay assessment when a minimum unjustified pay gap of 5% is identified, based on objective and gender-neutral criteria;
- the prohibition of pay confidentiality clauses.
1. Transparency in recruitment
- communicating the initial level of remuneration or the salary range before the interview (preferably in the job advertisement);
- prohibiting the request for information regarding a candidate’s pay history;
- some European states (e.g., Belgium, Lithuania) already apply such requirements.
- documenting objective and gender‑neutral criteria used for setting salaries and career progression;
- providing, upon request, the employee’s own pay level as well as the average pay levels for comparable positions, broken down by gender;
- maintaining the confidentiality of individual salaries – only aggregated data may be disclosed.
- employers with more than 250 employees → annual reporting;
- employers with 100–249 employees → reporting every three years.
4. Prohibition of pay confidentiality
- employers may no longer impose restrictions on the disclosure or discussion of remuneration;
- internal pay policies must be transparent and accessible to employees.
- developing or updating pay policies based on objective and documentable criteria;
- reviewing recruitment procedures to include salary ranges;
- preparing to handle employee requests for pay transparency;
- implementing the mechanisms necessary for pay gap reporting, where applicable.
The national framework already enshrines the principle of equal remuneration (Law no. 202/2002; Government Ordinance no. 137/2000), but it does not provide operational tools comparable to those required by the Directive. Moreover, Article 163 of the Labour Code, which regulates salary confidentiality, is in direct contradiction with the Directive’s pay transparency requirements.
In this context, transposing the Directive will require amending these domestic provisions, as well as introducing clear and detailed mechanisms regarding pay transparency and pay gap reporting.