The European Union member states, including Poland, have time until 7 June 2026 to implement the Directive on Pay Transparency (“the Directive”). The Directive imposes an obligation to apply mechanisms of transparency of pay and tools for its enforcement in order to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women. 

Employers have approximately 18 months to prepare their organisations to the new reality. It may seem that there is still a lot of time, but this could not be further from the truth. Many provisions of the Directive may require significant changes in payroll systems, in particular in companies which so far have not performed the process of valuation of work positions. It should also be borne in mind that 2026 will be the first reporting year in terms of reporting the pay gap for the largest employers. This means that by the start of 2026 payroll systems should have been reviewed and pay ordered.

In 2025 employers should review their payroll systems and implement the first pilot schemes. This will allow for a thoughtful analysis and diagnosis. This will allow time for making any adjustments and a full implementation of standards in 2026. We discuss the key regulations of the Directive below.

New principles of recruitment. Pay brackets in job advertisements – must-have or nice-to-have?
New obligations in the recruitment process will be imposed on all employers, regardless of the number of employees. 

Employers will be obliged to present information on pay (or pay brackets) already at the stage of recruitment – before the interview when the proposed pay is discussed at the latest. This aims to enable the applicants to prepare to the interview and ensure informed and transparent negotiations. According to the Directive the information does not have to be included in the job advertisement. We would like to note, however, that in December 2024 a draft law amending the Labour Code appeared (“Transparent pay” draft law) which is a harbinger of a partial implementation of the Directive. According to this draft, employers will be obliged to indicate pay brackets already in job advertisements. Accepting such domestic regulations would mean that a stricter solution that the EU regulations is adopted. Therefore, we have to follow further development of this draft.

Under the Directive, advertisements of vacancies and names of job positions must be gender neutral, which means that their content must not suggest preference for any sex. This means that the contents of the job advertisement should indicate that the job can be performed by a person of any gender. An example of a form of neutralising the nomenclature is using musculatives and feminitives (e.g. we are seeking a steward/stewardess). Companies may decide to introduce other forms of neutralisation of job positions e.g. by adding the genders in brackets, e.g. we will hire a photographer (m/f).

The EU regulations explicitly prohibit employers from asking the applicants during the recruitment process about their current or previous remuneration. The Directive also emphasises that the entire recruitment process must be carried out in a non-discriminatory manner in order to ensure equality of access to jobs and working conditions.

New right of the employees to information on remuneration 
One of the main premises of the Directive is employers having payroll systems which ensure equal pay for equal work or work of equal value. Each employer should look into and review the current remuneration structures and evaluate job positions. Employees must be given an easy access to information on the criteria used to determine their remuneration, levels of remuneration, and pay progression.

Additionally the Directive grants employees the right to apply for information (in writing) concerning their individual level of remuneration and average levels of remuneration, by gender, with regards to the category of employees performing equal work or work of equal value. In practice it means that an employee will know how his or her remuneration compares to that of other people of the same sex (doing equal work or work of equal value). 

He or she will know whether compared to others he or she earns little, an average amount or a lot. He or she will also find out how his or her pay compares to that of employees of the opposite sex (performing equal work or work of equal value), i.e. whether he or she earns more or less compared to them. Employees will be able to made enquiries in person or through an employee representative (trade unions or other employee representatives).

Employers will be obliged to provide information within “reasonable time” – no longer than two months. It will be possible to apply for additional explanations if it turns out that information provided by the employer is imprecise or incomplete. Employers will be obliged to remind employees once a year about their right to receive information concerning the remuneration and the steps which need to be taken to do so.

Employees will have the right to disclose their remuneration for the needs of enforcing the principle of equal pay. The Directive explicitly prohibits the use of clauses in contracts obliging employees to maintain confidentiality of information on their pay (currently these principles result from the judicial practice).

Computation and reporting gender pay gap
Additional obligations will also be imposed on employers concerning the pay gap. According to the Directive, the gender pay gap means the difference in average pay levels between female and male workers of an employer expressed as a percentage of the average pay level of male workers. 

As a rule, the obligation to compute and report the gender pay gap will apply to employers with 100 or more workers. Member states may however decide to impose this obligation on smaller companies too.

Information concerning the gender pay gap between workers broken down by categories of workers performing equal work or work of equal value will have to be reported not only to the monitoring authority, but also to employees and the employee representatives (probably trade unions or other employee representatives). The pay gap computed for employees performing equal work or work of the same value seems to be crucial as it may indicate actual inequalities. The intention of the EU legislator was to ensure that the pay gap does not exceed 5% in individual employee categories. The pay gap of 5% or more will result in the need to take further action involving joint assessment of pay in co-operation with the employee representatives. 

The frequency of reporting the pay gap should depend on the number of employees. Employers with 250 employees or more will provide this information on gender pay gap by 7 June 2027 (for 2026) and every year thereafter. Companies with 150 to 249 employees will provide the information by 7 June 2027 (and every three years thereafter). Employers with 100 to 149 employees will provide information on pay gap for the first time by 7 June 2031 (and every three years thereafter).

Are we facing the end of global remuneration policies?
The Directive introduces so called single source rule. According to this rule, employees will be able to compare their pay (amount and components) not only at their employer’s, but also between various group entities. It is sufficient if the parent company establishes pay policies for other companies, which is often a standard practice in capital groups. This not only applies to pay, but also to bonuses or incentive schemes.

If the regulations concerning the single source rule are implemented in the Polish law as they result from the Directive, employers will have two options. Either it will be necessary to ensure comparable remuneration for the employees in the whole group (who perform comparable work) or the decision making in terms of the remuneration policy will have to be transferred to the local level.

Sanctions for non-compliance with the Directive – it will not be worth it to ignore its provisions
The Directive provides for the need to introduce on national level the measures which will improve enforcement mechanisms for employees in the event of a violation of the principles of pay equality and transparency. It also introduces guarantees of compensation the employees may claim in the event of a violation. They are to be guaranteed the right to full compensation. The compensation should include lost benefits and penalty interest, among other things (without specifying in the national legislation the maximum amount of the compensation).

As far as the proceedings are concerned, the Directive introduces the principle of reverse burden of proof (as is currently the case in discrimination cases). This means that an employee will have to substantiate that he or she has been treated unequally and the employer will have to prove that unequal treatment did not take place or that any difference in pay was objectively justified. 

The Directive imposes an obligation on member states to introduce a system of dissuasive penalties (emphasising their preventive role). It is likely that violation of principles and obligations concerning pay equality and transparency will be considered by the national legislation as an offence against employee rights. 

Find more in the PRO HR Year Book 2024.