Equal Pay and the Persistence of the Gender Pay Gap
Equal pay between men and women has long been a core principle of EU law. However, despite a robust regulatory framework, the gender pay gap persists across all Member States.
Against this background, Directive (EU) 2023/970 marks a significant step forward in tackling structural inequalities in the labour market.
This Directive not only introduces new employer obligations but also reshapes remuneration policies by placing transparency at the centre of compliance.
Pay Transparency: Addressing Salary Opacity
The Directive is based on a clear premise: lack of salary transparency has been a key barrier to identifying and correcting pay discrimination.
Many employees remain unaware of pay disparities for work of equal value, making enforcement difficult.
The Directive therefore aims to:
- Ensure pay transparency before and during employment
- Enable comparison of roles of equal value
- Strengthen enforcement and access to justice
This reflects both a preventive and corrective regulatory approach.
Employer Obligations under the Directive
Transparency in Recruitment
Employers must disclose the initial salary or pay range before the interview stage. They are also prohibited from asking candidates about their salary history, preventing the perpetuation of past inequalities.
Employees’ Right to Information
Employees are entitled to request information on:
- Their individual pay level
- Average pay levels (by gender) for comparable roles
This enhances internal accountability and monitoring.
Gender Pay Gap Reporting
Companies with more than 100 employees must publish gender pay gap data:
- Over 250 employees: annually
- 150–249 employees: every three years
- 100–149 employees: every three years (after transition period)
Where an unjustified gap above 5% is identified, a joint pay assessment with employee representatives is required.
Job Evaluation and Classification
Job classification systems must be based on objective, gender-neutral criteria.
This requires reviewing traditional methodologies that may have undervalued roles predominantly performed by women.
Strengthening Legal Protection
Burden of Proof
In disputes, the burden shifts to the employer to prove that no discrimination has occurred where there is prima facie evidence.
Right to Compensation
Victims are entitled to full compensation, including:
- Back pay
- Bonuses and benefits in kind
- Moral damages
Sanctions
Member States must implement effective, proportionate and dissuasive penalties, including fines.
Impact in Spain and Business Adaptation
The Directive builds on existing Spanish legislation, particularly Royal Decree 902/2020.
However, further adjustments will be required, including:
- Increased transparency in recruitment
- Strengthened employee information rights
- Review of internal pay structures
Key Challenges for Businesses
Pay transparency represents a structural shift, requiring:
- Review of salary structures
- Implementation of objective job evaluation systems
- Balancing transparency with data protection
- Internal training for HR and management
This is not merely compliance—it is a cultural transformation.
Conclusion: A New Era for Equal Pay
Directive (EU) 2023/970 marks a turning point in EU equal pay regulation.
For businesses, compliance should be seen as an opportunity to enhance fairness, improve corporate reputation and align with ESG and governance standards.
Frequently Asked Questions
It requires employers to provide clear information on salaries to ensure equal pay.
Companies with over 100 employees.
No, this is prohibited.
A joint pay assessment must be conducted if unjustified.
They can request pay information and compare salaries by gender.
Adapting to pay transparency rules requires a thorough legal and organisational review.
Our employment law team can help you audit your remuneration policies, ensure compliance and mitigate legal risks.
