Pay Transparency Directive (EU) 2023/970

With the recent Directive (EU) 2022/2464 on Corporate Sustainability Reporting (CSRD), large, small, and medium-sized enterprises in both the private and public sectors are required to submit sustainability reports regarding the management of their products, with the aim of ensuring safe information for users and promoting transparency in five areas: a) business model b) policies (including due diligence procedures applied) c) results of those policies d) risks and risk management e) key performance indicators related to the specific business sector.
According to the OECD Due Diligence Guidance for Responsible Business Conduct (2018), the term “due diligence” also covers the field of employment and industrial relations (OECD, 2011, Chapter V).
Specifically, under OECD guidelines, multinational enterprises must demonstrate due diligence by respecting workers’ rights, such as engaging in collective bargaining through the establishment of unions, negotiating terms and conditions of employment, avoiding workplace discrimination, protecting health and safety, and ensuring fair wages.
Directive (EU) 2022/2464, by introducing transparency obligations through sustainability reporting, is fully aligned with Directive (EU) 2023/970 “Pay Transparency Directive,” which functions as its legal continuation.
With a transposition deadline of 07.06.2026 and an obligation for Member States to inform the Commission about its implementation by 07.06.2031, Directive (EU) 2023/970 aims to strengthen the principle of equal pay between men and women for equal work or work of equal value, through pay transparency and enforcement mechanisms. Its goal is to eliminate gender pay discrimination and uphold the right to equal pay by ensuring transparency in working conditions.
Considering the gender pay gap in Europe, which stood at 12% in 2023, and the negative economic conditions created by the Covid-19 pandemic that widened the existing gap between men and women, the EU adopted this Directive. It applies to all categories of workers, introducing the obligation of pay transparency to reinforce the principle of equal pay between genders.

Key Points

Application to employers in both private and public sector,
Equal pay for equal work, supported by institutions and encouraging employers to adopt evaluation methods and safe comparison of work provided,
Pay transparency before employment begins, with employers required to provide information on the initial salary objectively defined for the position,
Employee’s right to information about their individual pay and the pay of workers in the same category performing equal work,
The right to information is exercised through legal representatives; in their absence, employees may address the equality body or personally request missing information from the employer,
Employer’s obligation to continuously provide information on the pay gap to the equality body, employees, and the Labor Inspectorate,
Participation of Social Partners in shaping a safe, non-discriminatory work environment,
Right to compensation for employees in cases of discrimination,
Burden of proof on the employer to demonstrate that no pay discrimination occurred,
Assistance from a Single Authority in proving equal work or work of equal value, with supplementary use of statistics or other relevant data,
Sanctions through fines,
Monitoring of implementation by Equality Bodies, Labor Inspectorates, and Social Partners,
Obligation of Member States to provide annual national statistical data to the Commission (Eurostat).

Actions for Enterprises

As the role of enterprises in shaping modern socio-political reality grows, the need arises for a stable and reliable corporate framework that respects human rights and the environment.
Promoting the principles of the Union, the EU seeks uniform application and harmonization of legal rules across Member States. To this end, it requires evaluation of corporate methods, promotion of transparency with the participation of social partners, and establishment of supervisory bodies, creating a safe network for the protection of human rights in the business sector.

Recruitment Process

Disclosure of proposed salary in job advertisements,
No questions to employees about their previous salary during recruitment.

Organization of the Enterprise

Re-evaluation of the company’s system and policies,
Drafting of texts/regulations regarding procedures, salary levels, and information obligations,
Identification of a discrimination rate above 5% triggers mandatory evaluation of the pay system,
Organization possibly involving the use of AI tools,
Collaboration and continuous input from professionals,
Possible modification of existing employment contracts.

Risk Assessment

Consideration of employee reactions in cases where pay inequalities are identified,
Potential existence of pay inequalities among employees of the same gender.

We are closely monitoring the expected timeline for incorporation of the Directive into Greek legislation.