A new European framework for wage transparency

Directive (EU) 2023/970 must be transposed into national legislation by June 7, 2026, the date from which its main obligations will start to be effectively applied.

The aim of the regulation is to eliminate salary secrecy and provide employees and candidates with more information on compensation systems.

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Application timetable according to company size

The implementation of the obligations will not be immediate or uniform, but will follow a progressive schedule depending on the number of employees:

• Companies with more than 250 people: must comply with the obligations as of 2026.

• Companies between 150 and 249 people: application from 2027.

• Companies between 100 and 149 people: entry into force in 2031.

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As of 2027, larger companies will also be required to periodically report information on wage gaps within their organization.

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Main practical obligations for companies

The Directive introduces a set of specific obligations that affect both selection processes and internal compensation management. Among the most relevant are:

• Publication of the salary range in job offers or prior to the interview.

• Prohibition of asking about the previous salary history of candidates.

• The right of employees to know the criteria used to determine their remuneration and salary progression.

• Prohibition of salary confidentiality clauses, guaranteeing free communication of remuneration.

• Mandatory justification of wage gaps greater than 5% when there is no objective and neutral cause.

• Joint compensation assessments with employee representation if these gaps are not corrected.

These measures oblige companies to have structured, transparent compensation systems based on objective criteria, such as skills, responsibility, effort and working conditions.