Pay transparency isn’t only about women. It exposes more inequalities

The EU Pay Transparency Directive was to enter into force on June 7, and it requires employers to disclose pay ranges before hiring, report on gender pay gaps, and take corrective action when those gaps exceed 5 percent without justification. Workers will know what a role pays before they apply, and the burden of proof in discrimination cases shifts onto employers.

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The figures behind the law remain stark. Eurostat data shows women’s average gross hourly earnings across the EU stood 11.1 percent below men’s in 2024, a gap that has barely budged in a decade.

“Same job, same performance, same pay,” a European Commission spokesperson said when asked whether the directive could shift workplace power dynamics in employees’ favour. “There is no reason why women should earn less than men for doing the same work,” they added, framing equal pay not just as a fairness issue but an economic one. The European Institute for Gender Equality estimates closing the EU’s gender equality gaps could add €1.95 trillion to GDP per capita by 2050.

A patchwork rollout

7 June 2026 was the deadline for member states to transpose the directive into national law. Only a handful met it. The Commission said transposition “remains dynamic” in several capitals with legislative debate ongoing and warned that delay carries a cost. “Confusion and delays hinder both our competitiveness and our fight for gender equality,” the spokesperson said.

Where a country misses the deadline, Brussels can open infringement proceedings under Article 258 of the Treaty on the Functioning of the EU. Fines for non-compliant companies will be set nationally but must be “effective, proportionate and dissuasive,” according to the Commission, which also pointed to new protections for workers, including compensation for pay discrimination and the reversal of the burden of proof.

On the administrative burden on employers, the Commission argues that the directive simplifies rather than complicates matters. Reporting obligations apply only to companies with 100 or more staff. Smaller firms get lighter, phased requirements. The European Institute for Gender Equality has built a job-evaluation toolkit to help firms comply. “Every day without transposition is a day those rights are not fully enforceable,” the spokesperson added when pressed on the risk of further delay.

Beyond the gender frame

The directive’s legal architecture is built entirely around comparing women and men. But the data it generates, pay bands by job category, grade, hours, contract type and location, could, in principle, be used to map disparities that have nothing to do with gender at all.

Younger workers, who have absorbed much of the precarity stemming from weakened collective bargaining and temporary contracts since the 2010s, could find themselves systematically placed on lower pay scales than their older colleagues in equivalent roles.

Migrant workers, whose research consistently shows face wage penalties even after accounting for education and occupation, could have those gaps quantified rather than assumed. Disabled workers, often concentrated in lower-paid, lower-hour roles with stalled progression, could see disparities that currently surface only when researchers manually cross-reference separate datasets.

Ethnic and racial pay gaps are harder still to surface because most EU states restrict employers from collecting data on race or ethnicity, treating it as sensitive personal information. Where this kind of analysis has been attempted elsewhere, Massachusetts uses an encrypted, multi-employer system that lets companies report pay by demographic group without exposing individual firms’ data. It required deliberately building demographic categories into the reporting architecture from the start. The EU directive does not currently require anything comparable.

There is also a geographic gap hiding in plain sight. Research from the European Trade Union Institute has found that workers in Central and Eastern EU states are paid up to €1,000 less per month than their German counterparts for comparable work, even within the same multinational companies. The directive’s focus on within-firm, national-level gender comparisons does little to expose such cross-border disparities.

None of this is automatic. Whether transparency data surfaces these inequalities depends on whether member states require more granular reporting, whether unions and equality bodies push employers to cross-reference pay data against demographic information, and whether the political will exists to ask uncomfortable questions about who, beyond women, has been quietly underpaid all along.

For now, the directive gives Europe a tool built for one fault line. Millions of workers are waiting to see whether anyone uses it to look at the others.