Companies obliged to comply with Directive (EU) 2023/970 should at least 50 employees. However, it is still possible for companies with fewer than 50 employees to implement the planned measures.

The main obligations of the employer

Obligations before hiring

The Directive introduces pay transparency from the employer's recruitment process onwards.

Indeed, the companies will have to indicate in job postings and before the first interview the proposed remuneration or at least a range.

In addition, the applicant will be able to obtain information on the relevant provisions of the applicable conventions.

Once the directive has been transposed, it will also forbidden to ask candidates for the remuneration of their last posts and mandatory to ensure respect for the right to equal pay.

Obligations after hiring

Pay transparency is also intended to be applied internally, which implies several changes.

The employer must therefore make available to employees the criteria used to determine:

• remuneration;
• pay levels;
• the increase in remuneration.

Employers will comply with the GDPR in order to protect this salary data.

The establishment of reports

Reporting will have to be done, but these are subject to different criteria depending on the size of the company:

• the companies between 100 and 249 employees shall provide a report to all the 3 years (from 2027 for companies with 150 to 249 employees and from 2031 for companies with 100 to 149 employees). One obligation correction will be imposed on these companies for any deviation of more than 5%;
• the companies more than 250 employees shall send annual reports to the competent national authority with details of salaries by gender by displaying the criteria for setting salaries. Moreover, they will also have to correct any deviation of more than 5% between remuneration.
• the companies less than 100 employees may, if they so wish, report on remuneration without correction if the difference is greater than 5%;

Practical consequences for companies

In order to prepare for this transposition, companies will need to implement several changes:

• Update the internal HRD process to formalize evaluation criteria;
• revision of detailed pay scales to justify pay differences and progression criteria;
• HR and legal tools to be adapted;
• review internal and external communication to inform employees and candidates.

Reversal of the burden of proof

The European directive provides for a reversal of the burden of proof in terms of remuneration. Previously, the employee had to prove that the employer had violated the rules on pay transparency. When the Directive is transposed, the burden of proof will be on the employer.

The applicable penalties

Sanctions will be provided for in the event of non-compliance with pay transparency. Indeed, in the event of an infringement, the employer will be penalized with a administrative fine which will be proportional to the payroll or lump sum according to the seriousness of the breach. These sanctions can also be applied to job broadcasters.