EU Pay Transparency Directive: what companies should prepare now

Published: June 15, 2026
Last updated: 21. October 2026

The deadline expired on 7 June 2026. Germany missed it.

The EU directive on pay transparency was due to be transposed into national law until a few days ago. A German implementing law will come in 2027 at the earliest; the actual reporting obligations take effect from 2028. Those who wait now are giving away time for a task that needs preparation.

And anyone who hasn't yet seen the connection between pay transparency and parental leave is overlooking one of the most important starting points for fair pay in the company.

The key points at a glance

EU deadline expired, German law coming in 2027 at the earliest
Reporting obligations from 2028, staggered by company size
New obligations: salary ranges in job ads, no asking about previous salary, right to information
According to the IAB, pay progression after parental leave measurably falls behind
Prepare now: analyse structures, document criteria, adjust job postings

What the EU Pay Transparency Directive concretely requires of employers

The EU Directive 2023/970 on pay transparency obliges companies to do three central things: disclose pay structures, expand employees' rights to information and report regularly on gender-specific pay gaps.

Concretely, this means: job ads must in future include a salary range or a starting salary. Applicants may no longer be asked about their previous salary. Employees get the right to find out what colleagues in comparable positions earn.

The obligations take effect in stages (Directive (EU) 2023/970, Art. 9). Companies with 250 or more employees report for the first time on 7 June 2027 and annually thereafter. Companies with 150 to 249 employees also report for the first time in 2027, then every three years. Companies with 100 to 149 employees follow from 2031.

That sounds like bureaucracy. Behind it is something more fundamental: pay becomes visible. What used to lie hidden can in future be traced.

Why pay transparency and parental leave belong together

Here lies a connection that is often missing in the public debate.

Parents who return after a break often put themselves in a weaker negotiating position. They're glad to be back, don't know the current salary range in the team and ask less often. Pay rises granted during parental leave don't reach them automatically. Bonuses and promotions are pushed back. The Institute for Employment Research shows: the longer the parental leave, the more sharply pay progression falls behind compared to employees without an interruption. The effect sets in immediately after the return and persists over several years.

As long as pay structures are intransparent, this gap stays invisible. It doesn't arise from ill will, it arises much more from a lack of comparability. Only when companies disclose their pay structures does it become visible where inequalities creep in after parental leave.

Pay transparency is therefore also an instrument for a fair return after parental leave. Companies that support returners in a structured way and at the same time maintain transparent pay processes protect their employees better than any well-meant declaration of intent.

What can companies already do now, before the law comes?

Waiting for the national law is not a strategy. The EU directive applies. And companies that start now have less pressure when the law takes effect.

Analyse pay structures

The first step is internal. What pay differences exist between comparable positions? Where can they be justified with objective criteria, and where not? This analysis makes sense regardless of what the law ends up requiring exactly. Those who know their own structure can explain and defend it.

Document criteria for pay decisions

What justifies differences in pay? Length of service, experience, area of responsibility? If companies can't yet clearly name these criteria today, it becomes harder to present them to employees and authorities later. Clear, comprehensible criteria protect both sides.

Adjust job postings

Naming salary ranges in ads isn't legally required yet, but it's a signal. It attracts applicants who fit the salary range. And it makes the internal discussion about pay gaps more concrete, because expectations are visible from the start.

Those who want to structure the entire parental leave process in the company will find in the Parental Leave Support whitepaper a practical starting point.

Conclusion: those who prepare now have more room to manoeuvre later

Companies that understand pay transparency as an opportunity build trust. Employees returning after parental leave in particular notice the difference: those who know their pay is fair and comprehensible come back differently.

The law is coming. The question is whether companies then have to catch up or are already prepared. Those who start today have less pressure to act in 2027 and 2028 and more credibility.

Those who want to stay up to date on parental leave, return to work and company culture will find regular new insights in the heyGuide newsletter .

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