Salary transparency: a revolution in the making ?

Salary transparency: a revolution in the making ?

21 March 2025

The European Union is taking another major step forward in the fight against pay inequality. Adopted in May 2023, the directive on pay transparency imposes unprecedented obligations on companies to ensure greater fairness between workers. While the Member States still have to transpose it into their national legislation by 2026, employers and employees are already beginning to measure its effects.

Why is this directive causing such a stir? And above all, what concrete changes will it bring to the labour market ?

Why this directive ?

Despite decades of equal pay policies, the pay gap between men and women in the European Union remains around 13 % on average. One of the major obstacles to reducing this gap is the lack of pay transparency, which prevents workers from comparing their pay and makes it difficult to detect discrimination...?

With this new directive, the EU wants to impose greater transparency to force companies to adopt fairer pay practices. By making information accessible to workers and job applicants, the aim is to create a fairer and more competitive labour market.

But beyond the issue of gender equality, this directive aims to achieve overall pay transparency in order to combat all forms of pay discrimination. It could also benefit other underpaid groups, such as young workers, people with disabilities and minority employees, who sometimes face pay differentials for equivalent positions.

What this means :

Obligations for employers :

• Provide candidates with a salary range before the interview
• Prohibition on asking candidates for their salary history
• Companies with more than 250 employees are required to publish their gender pay gap figures each year
• Greater transparency on remuneration criteria and a ban on salary confidentiality clauses
• Obligation to correct an unjustified pay gap of more than 5%

A direct impact on workers :

• Better ability to negotiate your salary from the outset
• Employers can be asked for information on pay differentials and pay criteria
• En cas de discrimination salariale avérée, droit à une compensation et renversement de la charge de la preuve : c’est désormais à l’employeur de prouver qu’il respecte l’égalité salariale

What changes can we expect in the job market ?

À court terme, la directive va forcer les grandes entreprises à revoir leur politique salariale pour anticiper la publication de leurs écarts de rémunération. Cela pourrait entraîner une vague d’ajustements des salaires pour réduire les écarts injustifiés et éviter des controverses publiques.

In the medium term, pay transparency could transform the way companies recruit and retain talent. Candidates will have greater visibility over remuneration packages and be in a better position to negotiate, which will put pressure on employers to offer competitive and fair salaries.

This development could also reduce tensions within companies by limiting frustrations linked to unexplained pay differentials. By promoting greater fairness, the directive could also make employers more attractive and improve employee satisfaction.

It remains to be seen how each country will transpose these new rules and how companies will adapt to these obligations. One thing is certain: pay transparency will no longer be an option, but an unavoidable feature of tomorrow's labour market.