Update on the EU Equal Pay Directive: What Employers Need to Prepare For
The EU Pay Transparency Directive 2023/970 (the ‘Directive’) was due to be transposed into Irish law by 7 June 2026.
We published an article in March on some of the key changes imposed by the Directive and outlined how employers can prepare for these changes. You can read this article here: EU Pay Transparency Directive: Ireland’s 2026 Obligations Explained.
At the end of March the European Commission published updated EU- wide guidelines to assist employers, workers representatives, trade unions and employees amongst others in preparing for the changes. We will discuss these guidelines below and take a look at how they can assist employers with their preparations for implementation of the new Directive.
Phased Implementation of the Directive
Although Ireland has yet to fully transpose the Directive and no definitive timeline for transposition has been set, there is a lot employers can do to prepare for the incoming legislation.
The Department for Children, Disability and Equality (“DECE”) has stated that implementation of the Directive will take place on a phased basis. The initial focus is on implementation of Article 5 of the Directive, which relates to the provision of information on salary to potential employees. Therefore, we assume that implementation of the more composite elements of the Directive (i.e. equal pay for equal work) will follow at a later date. DECE also stated that employers will not be penalised for not having all elements of the Directive implemented by June. Nonetheless, employers should prepare now in order to be ready for all changes when implemented.
EU- wide guidelines
The updated guidelines which have been published by The European Commission are designed to help employers across the EU carry out gender- neutral job evaluation and classification to prepare for compliance with the Directive[1]. The guidelines contain a toolkit, a factor and subfactor plan, job profile templates and worker questionnaires along with a number of other tools to help organisations prepare for the changes.
Factor and subfactor plan
The Directive requires employers to assess roles using gender neutral and objective criteria, known as factors. The guidelines contain a factor and subfactor plan (the ‘Plan’) to assist employers with assessing roles in their organisation in order to support their gender- neutral job evaluation and classification.
The Plan sets out 4 main factors used to evaluate jobs (skills, responsibility, effort and working conditions). Each factor can be used directly for job evaluation. These factors can also be broken down into smaller subfactors (which provide a more detailed description of different jobs), if the employer feels that this is more relevant.
The 4 factors are broken down into the following subfactors:
| Factor | Subfactors |
1. | Skills | Knowledge, interpersonal and communication skills, problem-solving skills, planning and organisational skills and physical skills |
2. | Responsibility | People, goods and equipment, information and financial resources |
3. | Effort | Mental effort, psychosocial and emotional effort and physical effort
|
4. | Working conditions | Environment (physical, psychological or emotional) and organisational environment |
The Plan contains a definition for each sub- factor. There are corresponding levels for each subfactor from 0 to 8, with details of expectations for that level. There are also key questions in each subfactor to assist employers to determine the level. Additionally, there is guidance on ‘mistakes to avoid’ and ‘how to act’ contained at the end of each section to assist employers further. The factor and subfactor plan should be used in conjunction with the organisation’s relevant ‘pathway’ which we will discuss below.
Step- by- step Toolkit
The guidelines also contain a step- by step toolkit to help organisations carry out the gender- neutral job evaluation and classification.
Section 1 outlines who the toolkit is for and outlines the correct pathway to be used.
Section 2 outlines what a gender-neutral job evaluation and classification system is and the different types of these involved.
Section 3 provides information on the significance of gender- neutral job evaluations and classification systems.
Section 4 contains 10 tools designed to guide the employer through the job evaluation and classification process.
Section 5 contains the supporting materials (the factor and sub factor plan discussed above, case studies and templates).
Pathways
There are three different ‘pathways’ to be followed in the toolkit depending on the size of the organisation.
simplified approach for micro-organisations (fewer than 10 workers) - This approach is best for organisations in which formal job structures may not exist, and would be owner/ manager driven
simplified approach for SMEs – this approach is best for organisations with limited HR capacity and would be conducted by an owner/ manager with the assistance of a worker with a good overview of all the jobs in the organisation
standard approach for medium (50+ workers) and larger organisations (250+ workers) with diverse job roles and a structured HR process – this is the most comprehensive approach using an evaluation committee made up of representatives from different departments, levels and unions representatives
Once the pathway has been chosen the committee or manager shall use the appropriate “toolkit journey” consisting of each of the Tools associated with the pathway. These tools set out the framework for carrying out the job evaluation and classification. Each tool has an associated factor and subfactor plan which align with the requirements of the Directive. For example, if following the standard approach, employers are advised to use tools 0 1,2,5,6 and 7. Each of the tools is set out in detail in the toolkit.
Conclusion
The guidelines are comprehensive and structured with a view to providing employers with the tools to implement a systematic process for determining the relative value of jobs, based on objective criteria rather than assessing the person doing the job. If the Directive is implemented correctly by organisations, it should assist in creating a transparent and consistent basis for comparing jobs within an organisation without discrimination based on sex.
The guidelines will be of benefit to employers (in particular micro-organisations and SMEs) that are unsure how to prepare for the implementation of the Directive.
DECE has advised that they are aware of the need to ensure that employers know their obligations under the Directive and that there will be opportunities for employers to engage with the Department for clarification on issues. While it is of some comfort for employers to know that they will not be penalised for not having all elements of the Directive implemented by 7 June 2026, employers should nonetheless be cognisant of their obligations under the Directive and make the relevant preparations for the time when all elements of the Directive have been implemented.
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.
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