EU Pay Transparency Directive: Ireland’s 2026 Obligations Explained

The EU Pay Transparency Directive 2023/970 (the ‘Directive’) is due to be transposed into national law in Ireland by 7 June 2026 via the Pay Transparency Bill. The aim of the Directive is “to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms”[1]. While Ireland has made great strides in recent years with regard to closing the gender pay gap that exists in Irish workplaces, as we will see below, the new proposed legislation goes even further to close the gap.

In accordance with the provisions of the Directive, the proposed legislation shall promote greater transparency in relation to the renumeration of employees in Irish workplaces both in the recruitment stage and while employed.

Below we discuss some of the key changes imposed by the Directive, which will be implemented by the new legislation and what employers will need to be aware of once the legislation is enacted. We also discuss some of the ways employers can prepare their business to ensure compliance with the new legislation.

1.      Pay Transparency prior to employment

Article 5 of the Directive requires employers who are recruiting for any roles within their organisation to provide applicants with information about the initial pay or pay range for the position concerned and such pay or pay range must be based on objective, gender-neutral criteria. This information is to be provided in in a transparent manner such as publishing the pay that is being offered for the role in the job advertisement itself, or by informing the candidate of the salary prior to their interview.

Furthermore, employers need to be aware that they are no longer permitted to ask applicants the salary they are being paid in their current role, or what salary they have been paid in any of their previous roles.

Job titles will also be required to be gender neutral with a further express obligation on employers not to act in a discriminatory fashion when recruiting staff thus undermining the right to equal pay.

Once enacted, these new requirements will lead to a significant departure from historical recruitment processes where many employers avoided disclosing publicly the salaries offered to prospective employees with many organisations having benefitted from a culture of secrecy between employees in respect of their salaries. 

2.      Transparency of pay setting and pay progression policy

Article 6 of the Directive states that employers shall make the criteria that are used to determine employees’ pay, pay levels and pay progression in their workplace easily accessible to their employees. These criteria shall be objective and gender neutral.

The Directive provides Member States with the discretion to exempt employers with less than 50 employees from this obligation.

3.      Right to information

Article 7 of the Directive states that employees have the right to request and receive in writing information on their individual pay level and the average pay levels in their workplace, broken down by gender, categories of employees performing the same work as them or categories of employees performing work of equal value to theirs. Such information must be provided by the employer no later than two months’ after the request is made.

Employers shall inform all employees of this right to information on an annual basis.

Currently, there is no minimum threshold number of employees working in a workplace required to request this information, therefore all employers regardless of the number of employees they employ, need to adhere to and prepare for any requests of this nature. Therefore, despite there being no requirement on employers to disclose details of individual salaries, depending on the size of the organisation, disclosing average salaries broken down by gender for certain categories of employee performing the same work may lead to employees having access to specific details on their colleagues’ individual salaries. 

Furthermore the Directive requires member states to implement a ban on pay secrecy clauses in contracts. However, employers shall be entitled impose a restriction on disclosure of information on other persons pay which was obtained pursuant to a request for information provided for under Article 7.

In addition, employers will be obliged to provide all information referenced above in a format which is accessible to persons with disabilities, as necessary.  

The ability for employees to obtain information on pay levels for other employees performing the same work when coupled with the requirement to disclose pay or pay ranges prior to employment will constitute a major step forward for pay transparency in the workplace.

4.      Reporting on Gender pay gap

Ireland introduced obligatory gender pay gap reporting by way of the Gender Pay Gap Information Act 2021. The Employment Equality Act 1998 (Gender Pay Gap Information) (Amendment) Regulations 2025 then lowered the threshold number of staff working in an organisation required to trigger an employer to report on gender pay gap. As of 31 May 2025, Irish Employers are required to report on gender pay gap if they have 50 or more employees in their organisation.

Article 9 of the Directive goes further than the current legislation, requiring Member States to ensure that employers who employ 100 people or more, not only report on a gender pay gap in their organisation, but also provide the following information:

• The gender pay gap in complementary or variable components (Complementary or variable components means any benefits in addition to the ordinary basic wage or salary, which the employee receives);

• The median gender pay gap (means the difference between the median pay level of female and median pay level of male employees of an employer expressed as a percentage of the median pay level of male employees);

• The median gender pay gap in complementary or variable components;

• The proportion of female and male employees receiving complementary or variable components;

• The proportion of female and male employees in each quartile pay band (means each of four equal groups of employees into which they are divided according to their pay levels, from the lowest to the highest) and;

• The gender pay gap between employees by categories of employees broken down by ordinary basic wage or salary and complementary or variable components.

Employers will be obliged to provide employee representatives with access to the methodology applied to assess and confirm the accuracy of the reporting.

One of the most notable changes above is the requirement for employers to now include their employees’ complementary/ variable components along with their ordinary basic wage/salary. Employers with 100 staff or more therefore need to be aware that when calculating gender pay gap, they will need to include any bonuses, commission etc. that they pay to their staff.

The Directive, again, provides member states with the discretion to require employers with fewer than 100 employees to provide the above information on pay. Therefore, based on the current threshold for reporting on the gender pay gap in Ireland, it is quite possible that the Irish legislature will set the threshold for reporting at 50 or more employees. 

5.      Joint Pay Assessments

Article 10 of the Directive states that Member States are to ensure employers who are subject to reporting obligations in accordance with Article 9, conduct a joint pay assessment (in cooperation with their employees’ representatives) where the following conditions are met:

• There is a 5% pay difference in the average pay level between a male and female employee in any category of employee.

• There has been no justification for the employer put forward based on objective, gender neutral criteria.

• The employer has not rectified any such unjust difference in pay within 6 months of the date of submission of the reporting.

Once complete, employers will be required to make the joint pay assessment available to their employees and employees’ representatives and are to communicate it to the relevant monitoring body. They are also to make it available to the labour inspectorate and the equality body upon request. The employer is then to remedy the unjustified differences in pay within a reasonable period of time.

What can employers do to prepare for the new legislation? 

When recruiting:

• When recruiting for new employees, employers should ensure that the salary/ pay range on offer for the role is shown clearly in the job advertisement. Otherwise, the salary on offer should be communicated to the applicant in advance of their interview.

• Employers should ensure that they do not ask candidates about their pay history. Employers should update any interview templates they use and re- train any HR or other members of staff involved in carrying out interviews in their organisation on the new requirements.

  
  

 Pay information/ pay setting:

• All employers should review and gather information their employees’ individual pay levels and ensure they are accurate and up to date. 

• All employers should categorise their employees by gender and also categorise employees who perform equal work or work of equal value within their organisation. 

• Processes should be implemented to ensure that the pay information categorised as above will be readily accessible when requested. 

• Employers should put in place measures to prohibit/ revoke any terms in contracts or company policies preventing employees from disclosing their pay. 

• Employers with 50 or more employees should also define the objective and gender-neutral criteria used for all pay decisions, such as salary increases or bonus payments. Similar to pay information, processes should be implemented to ensure that these criteria will be readily accessible when requested.

Gender pay gap:

• Employers with 50 employees or more are already subject to gender pay gap reporting. However, employers with 100 or more employees should ensure they adhere to their additional obligations required by Article 9 above by gathering the relevant information required outlined above. Despite not being expressly required by the Directive, employers with 50 employees or more should pay close attention to the progression of the Pay Transparency Bill to monitor whether they are also included.  

• Employers should ensure that IT systems are up to date and sufficient to capture an accurate picture of employees’ details, in order to comply with the requirements of the Directive. 

• If any gender pay gaps are identified, ensure steps are taken as soon as possible to remedy same.

The heads of the Pay Transparency Bill are currently being prepared. The Directive requires Member States to give technical assistance and training to employers with fewer than 250 employees to facilitate their adherence to the obligations set out in the Directive. This will no doubt be welcomed by smaller employers in Ireland to assist with their adherence to the new legislation, as the additional requirements will add an additional burden to their compliance processes. Employees will welcome the new changes as they will encourage fairness and transparency in the workplace regarding their renumeration.

This article should not be regarded as a substitute for legal advice from Power Law LLP. Legal advice should always be taken before acting on any of the matters discussed above.

[1] Directive (EU) 2023/970

For further details on this or related matters, please reach out to Billy Casserly and/or Noelle Whelan or any member of the Power Law team, including our Employment Department.