EU Pay Transparency: why this directive could transform the workplace (beyond just salaries)
If a candidate shared their salary expectations before even discussing their technical skills, you’d likely dismiss them as “overly ambitious” (at least, that is the prevailing mindset in Italy). Yet, talking about money, a topic considered strictly taboo until recently, is set to become the new normal, thanks to the EU Pay Transparency Directive (2023/970).
A push toward transparency: breaking old habits
In many companies today, compensation remains a “black box”. At best, it is only discussed once the selection process is over, often hidden behind vague clichés like “salary commensurate with experience.” As recruiters, we see this constantly: the request to see a candidate’s previous pay slips is still standard practice form many clients. It is clear that this approach is deeply entrenched, andshifting this mindset won’t happen overnight.
Looking at the broader european landscape, however, the tide has already turned. Spain, for instance, introduced rigorous standards between 2020 and 2021: mandatory pay registries for all companies, pay audits, and equality plans for those with over 50 employees, alongside the right for workers to access data on average salaries by role. In contrast, Italy’s gender equality certification remains voluntary, and biennial reporting is only mandatory for companies with more than 50 employees. Current transparency obligations toward candidates are often toothless; in practice, it remains a far less rigid and transparent system than the Spanish model.
Nevertheless, we are witnessing a paradigm shift driven by cultural changes we see daily on social media. Gen Z and the generations following them have grown up in an era of instant information and public comparison. To them, transparency is a value, not a risk. They don’t hesitate to ask direct questions about their role, career progression, work-life balance, and, crucially, their pay. For them, discussing salary isn’t taboo—it’s an essential part of peer-to-peer interaction. Now, the law is finally catching up with this mentality.
By June 2026, job postings must indicate a starting salary or a specific range, or at the very least, this information must be disclosed before the first interview. Furthermore, employers and recruiters will be subject to a salary history ban: they will no longer be allowed to ask about your past earnings, ensuring that your previous pay doesn’t cap your future potential.
Your right to know and compare
But that’s not all.
The changes go beyond the hiring phase. Once onboarded, employees have the right to request information on average pay levels for their category, broken down by gender. They can also demand clarity on the criteria used to determine salaries and promotions.
This means that if you suspect a colleague in the same role is out-earning you, you will finally have access to objective data.
Reporting obligations and corporate accountability
For many organizations, this isn’t just a matter of “being open”. It’s a formal legal requirement.
Companies of a certain size (starting with those over 250 employees, followed by those with 150 and 100) must publish periodic reports on their gender pay gap. If a gap exceeding 5% is identified and cannot be justified by objective factors, the company must conduct a joint pay assessment in cooperation with workers’ representatives.
This isn’t just a tweak to a job ad; it’s a mechanism to expose dynamics that have stayed hidden for too long.
When the numbers speak
EU statistics show that, on average, women earn about 12-13% less per hour than men for equivalent work. This directive provides the tools to uncover, understand, and, where necessary, challenge these disparities.
For HR professionals, this is a call to rethink compensation culture: moving away from secrecy and toward a system built on trust and meritocracy.
Conclusion: a silent revolution
Ultimately, transparency is more than a technical adjustment; it’s a cultural shift that challenges legacy habits. Just as a new generation brings fresh perspectives to the workforce, this regulation encourages a more open dialogue about money, fairness, and the true value of people.
The real challenge for us as recruiters is ensuring that transparency doesn’t remain a buzzword, but becomes an integral part of every hire, every interview, and every career path.
Sources
2 – https://www.consilium.europa.eu/en/policies/pay-transparency/
