Your Pay Transparency Questions Answered: Insights From Our Webinar

The EU Pay Transparency Directive will soon be in effect across all 27 member states — and employers across Europe are starting to prepare. We recently hosted a webinar to help businesses on this preparation journey. 

As well as an expert discussion, the webinar included a lively Q&A session, in which our panelists answered pay transparency questions from participants. And there were some great questions — we’ll revisit some of the most pertinent ones in this blog post.

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About our recent pay transparency webinar

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This pay transparency webinar took place in December 2024. In it, our very own CEO and Founder Virgile Raingeard was joined by two experts in pay transparency: Rachel Gibbs, a Reward Consultant based in Switzerland, and Max Eckert, an Organisational Consultant at Lenus.

During the webinar, the three panellists discussed much of what there is to know about the pay transparency directive including: 

• The latest regulatory updates related to pay transparency in Europe 
• How prepared most companies are for pay transparency (hint: not very!)
• How employers can use job levelling to define ‘work of equal value’
• How the rules will apply to different types of organisations across Europe 
• Real-life examples of companies handling pay transparency

To get the full lowdown, check out the webinar replay — or keep reading for some of the highlights. 

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What we learned: 7 answers to your burning questions

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Let’s get into it: here are the top seven questions asked during our pay transparency webinar — with answers from our experts. 

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1. What do we mean when we talk about pay transparency?

First things first: what does ‘pay transparency?’ actually mean? Rachel put it very simply: ‘People need to understand the job level they’re in and how that’s determined, which should be based on gender-neutral factors. And they need to understand how they’re paid within the pay range for their job level.’

Another important element is salary transparency for job applicants. The directive requires that employers share either a starting salary or a range with candidates before the interview stage. 

What it doesn’t mean, though, is that everyone will know how much everyone else is paid. This kind of radical transparency does exist: Buffer is the most famous example of a company that openly shares all of its salaries with the general public. However, this is both extremely rare and way beyond the scope of the pay transparency directive.

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2. What can companies do to get a head start on upcoming legislation?

This question is really the focus of our whole webinar: how can employers maximise the last few pay review cycles remaining before the legislation comes in? According to our experts, the first step is to figure out what ‘work of equal value’ means for your organisation. If you haven’t already done so, implementing a robust salary band system is a great place to start.

Defining salary ranges for each role provides a basis for communicating about pay, both internally and with job candidates. It also allows you to begin evaluating your pay practices and looking for internal discrepancies and irregularities ahead of the directive. 

Of course, preparing for the directive will be a lot of work — which is why it’s best to start now. For more tips and a step-by-step process to follow, check out our full guide to preparing for the pay transparency directive. 

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3. How will the rules apply to multinational companies? 

Our webinar also raised a few questions about how the directive will impact companies with employees in several countries. For example, some attendees worried that they would need to justify pay differences between employees in different European countries once the new rules are in play. 

To be clear, that’s not the case: there’s no cross-border element to the directive, and employees will not be asked to align pay for employees in different countries. However, that doesn’t mean that employees won’t make these comparisons themselves as information about pay becomes more freely available. This is especially true within the euro zone where salaries are more easily comparable. 

From an employee engagement perspective, employers will need to get better at communicating the factors that go into pay decisions — even when that’s not technically required by law. Or, as Virgile puts it: ‘You’re going to have to be better at communicating the ‘why’ of pay decisions. It’s going to force you to be better at communicating and educating people about pay.’

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4. How can employers reconcile jobs of equal value to the company with benchmark data showing different salaries for each? 

The directive is clear that going forward, equal pay cases will apply not just to employees performing the same role, but to anyone whose work is of ‘equal value’ to their employer. Examples of roles that have been ruled to be of equal value by courts include: 

• Clerical assistant and warehouse operative 
• Canteen worker, cleaner, surface mine worker and clerical worker 
• School nursery nurse and local government architectural technician 
• Head of speech and language therapy and head of hospital pharmacy service 

As you can see, many of these roles are quite different — and each has a different market value. But that won’t necessarily be enough to justify a difference in salary once the directive is in effect. 

To give a real-world example, Rachel highlighted a case from the UK, where retail chain Next recently lost an equal pay claim comparing the pay of (predominately male) warehouse workers and (predominately female) shop-floor staff. The company claimed that material factors including market forces and market price were behind the discrepancy. However, the Employment Tribunal found that these factors were indirectly discriminatory and could not be used to justify unequal pay. 

Of course, the UK is not part of the EU, and the directive will not apply there. But this still provides an interesting example of what could happen if EU employers focus too much on market benchmarking and not enough on internal comparisons. As Rachel says, ‘It’s work of equal value, and if you’re not valuing it equally then you’re not compliant.’

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5. Will the rules apply only to base salaries, or should other compensation components be taken into account?

As HR and compensation pros know well, an employee’s pay is made up of more than just their base salary. Depending on the employee’s role and the organisation’s compensation structure, they may also receive bonuses, commissions, benefits and equity-based rewards, for example. Once the directive is in effect, employers will have to carry out reporting and analysis not just on their employees’ base salaries, but on all of these elements as well. 

However, exactly what this looks like will depend on the unique circumstances of each company, and may also vary according to each country’s interpretation of the rules. For example, an employer would likely be able to justify paying commissions to a sales employee and not an employee in another department, even if their work is ‘of equal value’. That’s because, in this case, commission serves a business purpose which isn’t applicable to all roles. 

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6. How will company size be measured for the purposes of the pay transparency rules?

While some parts of the directive will apply to all employers, others will only impact those above a certain size threshold. For example, only organisations with 250 or more employees will have to report annually on their gender pay gap (those with 100–249 will have to report every three years). 

But determining how many employees a company has isn’t always as simple as it sounds. As one participant asked, what would happen if an organisation was made up of multiple individually registered companies with less than 50 employees in each one? 

According to Rachel, the answer comes down to whether the organisation in question is a ‘single source employer’. In other words, if pay decisions are made centrally, the organisation likely counts as one employer for the purposes of the directive. Of course, this is only when each of the individual companies is registered within the same country — as we’ve said, employers will never have to make comparisons between two different countries within the EU. 

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7. When will the law be made final across the EU? 

The deadline for implementation is June 2026. However, some countries will bring in new rules before this date (Sweden already has). That means that, wherever you are in Europe, you have less than two years to go until the directive is in force, and less than three years until you need to submit your first gender pay gap reports. Given that most companies perform compensation reviews only once a year, that’s not long at all — which is why you need to start preparing now. 

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Learn more about preparing for pay transparency 

The pay transparency directive will soon be in effect in your country — and early preparation will be key to a smooth transition. To learn more about the upcoming directive and how it will impact different types of businesses in Europe, check out our full webinar replay. 

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