The European Union’s pay transparency directive (Directive (EU) 2023/970) introduced the principle of “equal pay for equal work or work of equal value,” aiming to eliminate pay discrimination under the obligation that job roles of equal worth receive equal pay, regardless of gender.

Quick Hits

• In the EU, pay transparency has been identified as a key obstacle to closing the gender pay gap. Directive (EU) 2023/970 aims to close the gender pay gap and promote fair pay practices by increasing transparency and accountability between employers and employees.
• The principle of “equal value” will require employers to undertake an evaluation exercise to determine where equivalence of the respective value of roles may exist across their organisations. Employers may want to consider preparing for this now.
• EU member states have a deadline of 7 June 2026 to transpose the directive into national law. Each member state has the autonomy to transpose the directive in its own way, provided the directive’s minimum requirements are met.

What Does ‘Equal Work or Work of Equal Value’ Mean?

Directive (EU) 2023/970 defines equal pay not only for identical roles but also for jobs that contribute comparably to an organisation’s success. Employers must assess job roles using objective, gender-neutral criteria. Each EU member state may derive its own methodology for determining whether two roles are of equal value, but minimum factors to consider for each role should include:

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