The European Commission issued guidance in August 2026 on the EU Pay Transparency Directive (2023/970), clarifying certain definitions while leaving other employer obligations ambiguous or unaddressed.
The guidance was issued in the form of frequently asked questions and confirms that the directive applies broadly to employers in both public and private sectors, including those covered by collective agreements.
The FAQs also confirm that the directive does not apply to genuinely self-employed workers, offering some clarity to businesses relying on contractors or freelancers.
On the question of pay information in job adverts, the guidance states that details must be provided before a job interview rather than within a job advertisement itself.
However, this position remains subject to national implementation, with some member states such as Italy already mandating that pay information appears directly in job postings.
The guidance also addresses compatibility with the General Data Protection Regulation, confirming that equal pay compliance represents a “public interest” under GDPR Article 6(3).
Member states retain the option to introduce additional safeguards where small comparator groups of pay data could risk revealing an individual’s salary, with Article 12(3) of the directive allowing disclosure only to workers’ representatives, labour inspectorates, or equality bodies.
Concerns around perceived incompatibility between the directive and GDPR remain live, and this area is widely expected to develop further as implementation progresses across member states.
The FAQs provide clarification on what counts as “pay,” confirming that payments or benefits available to all workers without eligibility criteria, such as laptops or mobile phones, do not need to be included in pay reporting.
Optional benefits without eligibility criteria, such as a gym membership that a worker may choose to take, are similarly excluded from the definition of pay under the directive’s framework.
The guidance outlines four key characteristics for determining equal value between roles: skills, effort, responsibility, and working conditions, noting that additional factors may be permissible if gender-neutral and relevant.
Despite this, the FAQs do not expand on what additional factors would be considered acceptable, leaving employers with limited practical guidance on how to conduct equal value assessments.
Market conditions are referenced as a potential factor that may affect or explain pay differences, though the guidance warns this should be “treated with caution” as it is less likely to be linked to the actual value of a job.
The guidance does not address the practical implications for employers whose workforce is not represented by trade unions, leaving a significant gap for many businesses operating across the EU.
Although the United Kingdom sits outside the scope of the directive, it will be interesting to see if the recent judgment in the case of Next Retail v Thandi and Others is mirrored elsewhere across the EU.
Ogletree Deakins partners Daniella McGuigan, co-chair of the firm’s Pay Equity Practice Group, and paralegal Mai Barry contributed analysis of the directive’s current implementation landscape.
Ogletree Deakins’ London office, Cross-Border Practice Group, Pay Equity Practice Group, and Workforce Analytics and Compliance Practice Group will continue monitoring developments as national implementations evolve across EU member states.