The new EU Pay Transparency Directive coming to force on 7 June, 2026 is set to transform the way companies across Europe approach pay, recruitment, and internal HR processes.
With the implementation deadline approaching, now is the time for organisations – large and small – to get ready. Yes, this will include all companies in the medical cannabis industry operating throughout the European continent.
To get you up-to-speed, we have written this quick-reed article to provide you with actionable insights and clear steps to ensure compliance and stay competitive.
Executive Summary
Table of Contents
What is the EU Pay Transparency Directive?
Aim:
The new EU Pay Transparency Directive aims to enforce the principle of “equal pay for equal work or work of equal value” between men and women. This means that employees assigned to the same or equivalent roles should receive similar pay, unless objective reasons justify a difference.
The overall focus is on eliminating gender pay gaps.
Scope:
- Applies to both public and private sector employees in the EU.
- Obligations vary by company size, but all organisations must comply with transparency rules.
Timeline:
- When was it proposed? – The EU Council adopted the Directive 2023/970 in April 2023.
- From when do the rules apply? – The Directive has to be transposed into national law by 7 June 2026.
- When do the first reporting obligations have to be made? – From 2027, depending on company size.
Legal Obligations for EU-based companies
1️⃣ Equal Pay for Equal Work
Employees in the same or equivalent roles must receive similar pay. Any pay gap greater than 5% must have an objective, non-discriminatory reason to justify the difference.
2️⃣ Pay Reporting
Companies must provide information on gender pay gaps, including both fixed and variable remuneration. Information must be shared with labor authorities, employees and trade unions.
The frequency of these report submissions depends on the company size. Companies with 250+ employees need to make annual submissions, companies with 100-249 employees are required to submit every 3 years, while companies with less than 100 employees are not required to submit a report, but must still comply with the rest of the obligations.
3️⃣ Transparency Beyond Salary
Pay transparency covers not only salary but the entire compensation package (i.e., base salary, variable pay, bonuses, and fringe benefits.)
4️⃣ Pre-Hiring & Ongoing Obligations
- Job Advertisements/Postings – Salary ranges must be disclosed in job postings or before interviews. Wide ranges (e.g., 30-40k) should be avoided, instead aim for a 10k spread around the median, or even tighter if possible.
- Job Interviews – Companies will no longer be permitted to ask job applicants about their salary history during job interviews.
- During Employment – Employees will have the right to ask for information on the average pay of individuals doing similar jobs. Furthermore, companies must clearly communicate a gender-neutral criteria for career advancement.
5️⃣ Ensuring justice for employees
- The directive establishes provisions for compensating workers who have faced pay discrimination while imposing penalties on employers engaged in such discriminatory practices. Notably, it transfers the burden of proof for pay discrimination from the employee to the employer.
How will this affect EU-based companies?
Non-Compliance Will Have Consequences
These previously mentioned obligations are not optional. All companies operating in Europe must comply, otherwise they risk being hit with:
- Administrative Fines:
Amounts will vary by country and case. - Legal Action:
Employees, unions, or equality boards can bring claims before national courts. The burden of proof shifts to the employer to demonstrate that pay differences are based on objective criteria. - Compensation to Affected Workers:
Companies found guilty of pay discrimination may be required to pay the affected workers for material and non-material damages. Furthermore, claimants will not bear legal costs if their claim is well-founded. - Reputational Damage:
Failure to comply can harm employer brand and trust once negative word-of-mouth or publicity spreads.
Implications on the European Job Market
As we all know, salary or compensation in general has always been one of the biggest drivers in the recruitment process. It can be a competitive advantage – often the final deciding factor – when winning top candidates.
With the directive coming into effect, here are the likely effects on the European job market:
- Competitive Pressure:
Companies paying below market average will struggle to attract talent unless they offer strong benefits or culture. - Reduced Talent Mobility:
With most companies focused on cost control at the moment, the salary for a given position across the board will remain relatively similar. With less salary variation, candidates may have less motivation to switch – and may move only for reasons other than pay (e.g., growth, culture, etc.).
For candidates, this directive is a win. They’re granted more transparency, a level playing field, and more bargaining power if they understand salary bands, average pay by gender, promotion criteria, etc.
For companies and recruiters, however, the directive makes things a bit more challenging:
- Finding sufficient trustworthy data for salary benchmarking can be tricky.
- Payroll software upgrades may be required to efficiently compile the necessary pay audits & reports.
- Companies may face an initial resistance from the HR department, management and employees due to the extra work or discomfort over pay practices no longer being confidential.
- Companies must find a fine balance between transparency & the protection of sensitive employee data.
- In recruiting, salary flexibility as a persuasion tool shrinks. Companies will not be able to pay below the published range even if the candidate previously earned less, nor will they be able to make substantial offers that exceed the 5% pay gap rule.
A guide on preparing for the EU Pay Transparency Directive
With everything that has been stated so far, the directive will bring about big changes, and we would be remiss not to offer practical advice on getting your company prepared for the road ahead.
A Step-by-step guide for HR & Leadership
1. Cross-Functional Involvement
For bigger companies, this is crucial to keep progress on schedule. Pay transparency requires a cross-functional approach. Form a working group with representatives from HR, talent acquisition, compensation and benefits, finance, payroll, legal, DEI, CSG, and IT. Early involvement from all these teams is crucial for successful compliance.
2. Assess Current Systems
Ensure your current systems can capture the data needed for pay equity. Evaluate whether your HR systems can support pay transparency, including tracking, analysing, and reporting pay data by role and demographics. Conduct an initial audit to identify gaps and create a communication plan to keep employees informed.
3. Update Organisational Charts and Job Descriptions
Ensure all roles in your organisational chart are clearly defined and current.
4. Conduct & Validate Your Job Evaluation Methodology
Job evaluation is a process of analysing and clustering roles, and ranking them by importance in terms of the value provided to the company. The key is to assess the job & its characteristics – not the person. Use recognised, bias-free methodologies (e.g., factor-point method) to cluster roles by value and ensure gender-neutral evaluations.
How to Recruit Top Talent?
This is the question on most executives’ minds. Below are a few of the most impactful strategies that must be considered to stay ahead of the game:
- Leverage Total Rewards:
Apart from salary, highlight job benefits, flexibility, hybrid or remote work arrangements (if applicable), and learning opportunities. - Transparency as a Differentiator:
Open pay practices build trust and often attract better-aligned candidates. - Employer Branding:
Define and communicate your unique culture and values authentically. This also helps attract candidates with the right culture fit – as well as help the recruitment team better filter through job applicants. - Invest in HR and Leadership:
Strong managers and efficient processes are crucial for attracting and retaining talent. - Speed Up the Hiring Process:
Streamline hiring to secure top candidates quickly. This includes quickly responding to applicants with updates on the hiring process, ensuring they’re given feedback on their engagement, making sure expectations have been clearly and transparently communicated, and expediting interview rounds (as well as reducing the number of interview rounds whenever possible).
💼 To simplify hiring, an increasing number of companies in the cannabis industry are working with recruiters – such as Lumino – to activate networks and efficiently find them the right candidates for pivotal roles.
How the pay transparency directive is being implemented by each country
Updated from October 2025
Austria
No transposition measures have been reported. Current legislation in Austria requires employers to disclose minimum wages in job vacancy advertisements and mandates certain reporting obligations for organisations with 50 or more employees. Additionally, the government offers an online wage calculator (available in German) to assist employees in assessing whether their pay is equitable.
Belgium
In September 2024, the Wallonia-Brussels Federation (the French Community of Belgium) became the first EU jurisdiction to implement the Pay Transparency Directive. The new rules apply to public entities under the Federation’s responsibility.
Notably, the measures go beyond the directive’s basic requirements. Employers must now disclose the starting salary or pay range when posting a job opening – whereas the directive only mandates this information before interviews.
This represents a partial transposition of the directive; full implementation will occur at the national level. Belgium will likely adjust its existing pay transparency laws, which already require companies with 50 or more employees to report on pay data.
Bulgaria
No progress on transposing the directive has been reported.
Croatia
No progress on transposing the directive has been reported.
Cyprus
No progress on transposing the directive has been reported.
Czech Republic
The Czech Republic has not yet implemented the directive, but a government working group is drafting the necessary legislation. Meanwhile, an amendment to the Labour Code taking effect on 1 June 2025 prohibits pay secrecy clauses in employment documents. Employers who violate this rule may face fines of up to CZK 400,000 (approximately EUR 16,000).
Denmark
No steps toward transposition have been reported. Currently, employers with at least 35 employees must annually provide employee representatives with either gender-segregated wage data or an equal pay report. However, they are not required to publish this information or submit it to any regulatory authority.
Estonia
No official transposition progress has been reported in Estonia, though the Ministry of Economic Affairs plans to draft legislation by summer 2025. In the meantime, a digital platform called Pay Mirror (Palgapeegel) is being developed by Statistics Estonia and the Ministry of Social Affairs. Once the directive takes effect, the tool will help employers detect pay gaps and inconsistencies using register-based data.
Finland
In May 2025, Finland’s Ministry of Social Affairs and Health released draft legislation that closely follows the directive’s minimum standards. It requires employers with at least 50 employees to disclose their pay criteria and mandates pay reporting for companies with 100 or more employees.
The proposal also bans questions about salary history and obliges employers to provide salary details before pay negotiations. While it recommends including this information in job ads, it stops short of making that mandatory. Noncompliance could result in fines ranging from €5,000 to €80,000, depending on the case’s severity.
The draft remains subject to revision. Employer groups have criticised it as legally unsound and exceeding EU requirements, warning that it could harm competitiveness and impose excessive administrative burdens on Finnish businesses.
France
France has not yet transposed the directive, but in May 2025 the Minister of Labour confirmed several key details. Most notably, the government intends to move swiftly and aimed to present draft legislation by September 2025. However, the government’s dissolution in early September has slowed progress, likely delaying the bill’s introduction. The legislation is still expected to take effect before 7 June 2026.
The minister also announced that implementation will involve a redesign of the existing Equal Pay Index (Egapro Index), which currently requires employers to publish key pay statistics each year.
The updated system will align with the directive, replacing current metrics with a new seven-indicator index. Six of these indicators will be automatically collected through the Déclaration Sociale Nominative (DSN) payroll reporting system. The seventh will require companies with 250 or more employees to report their gender pay gap annually, and those with 50–100 employees to do so every three years.
While the government has not yet specified sanctions for non-compliance, it has stated that they will be designed to have a ‘dissuasive effect’, suggesting they will be substantial.
Germany
In July 2025, German authorities announced the formation of a formal Commission to begin implementing the Pay Transparency Directive. The Commission comprises experts from business associations, social partners, the German Trade Union Confederation (DGB) and the Confederation of German Employers’ Associations (BDA). It is expected to present its proposals to the Federal Ministry for Gender Equality by October 2025, after which the legislative process will commence.
Implementing the directive in Germany will require amendments to existing legislation, particularly the 2017 Transparency in Wage Structures Act (Entgelttransparenzgesetz or EntTranspG). Under this law, employers with more than 500 employees must regularly report on measures taken to ensure equal pay. Additionally, employees in organisations with at least 200 staff can request information on how their salary compares with colleagues.
Greece
No progress on transposing the directive has been reported.
Hungary
No progress on transposing the directive has been reported.
Ireland
On 15 January 2025, Ireland became the fourth European country to begin implementing the directive through the General Scheme of the Equality (Miscellaneous Provisions) Bill 2024.
The bill partially transposes the directive. It bans employers from asking candidates about their salary history and requires salary information to be included in job advertisements—going further than the directive, which only mandates this information before interviews.
The bill does not yet address the gender pay gap reporting requirements. However, Ireland already has reporting obligations: organisations with 150 or more employees must report annually on mean and median pay and bonus gaps, as well as the proportion of men and women receiving bonuses. From 1 June 2025, these requirements will extend to companies with 50 or more employees.
Italy
No steps towards transposition have been reported. At present, Italian employers with 50 or more employees must report gender and pay data biennially. Italy also operates a gender equality certification scheme, highlighting companies that take substantial measures to reduce the gender pay gap.
Latvia
No transposition activity has been reported. While Latvia introduced mandatory wage transparency in job advertisements in 2018, there are currently no employer reporting requirements, meaning the directive will represent a significant change.
Lithuania
In May 2025, Lithuania published a draft bill partially transposing the directive. The proposed legislation would allow employees to request information about their pay and how it compares with colleagues in similar roles. It also requires employers to base pay structures on gender-neutral criteria and bans questions about candidates’ previous salaries during recruitment.
If enacted, the bill would build on Lithuania’s existing laws, which already mandate salary ranges in job postings and prohibit inquiries about past pay. The country also has pay gap reporting requirements for companies with 20 or more employees and obliges employers to address gaps of 5% or more, measures already aligned with the directive.
Luxembourg
No official transposition activity has been reported, though preparations appear to be underway. While there are currently no gender pay gap reporting obligations, employers with 50 or more employees must provide employee representatives with certain sex-disaggregated statistics every two years. Additionally, the Ministry of Equality Between Men and Women (MEGA) has created an online tool to help employers identify the causes of any pay gaps.
Malta
In June 2025, the Maltese government published draft legislation partially implementing the directive. The law requires employers to provide pay information to job applicants before employment begins. However, it stops short of other measures: there is no obligation to include salaries in job adverts and no explicit ban on asking candidates about their salary history, as the directive requires.
The draft also grants employees the right to request information about their own pay and that of colleagues performing the same work, but it does not extend this to colleagues doing ‘work of equal value’, a key principle of the directive. Gender pay gap reporting is not included and will require further legislation ahead of the June 2026 deadline.
Netherlands
In March 2025, the Dutch government published draft legislation to implement the Pay Transparency Directive. Rather than creating a new law, the draft proposes amendments to the existing Equal Treatment for Men and Women Act to align it with the directive’s requirements.
The bill largely mirrors the directive, addressing equal pay for work of equal value, gender pay gap reporting, and employee information rights. It also clarifies that in pay discrimination cases, the burden of proof rests with employers, who must demonstrate that any pay differences are not due to gender.
Notable differences include lowering the reporting threshold to employers with 100 or more employees, compared with the directive’s 150-employee minimum, and adding provisions regarding the treatment of temporary workers.
Poland
On 5 December 2024, a group of Polish MPs submitted a draft law that would partially implement the directive. While not yet a formal government initiative, it represents an initial step towards transposition. The draft focuses on pay transparency provisions and does not address gender pay gap reporting.
The bill generally aligns with the directive and goes further in certain areas. For instance, it requires employers to include salary information in job adverts, whereas the directive only mandates disclosure before interviews. It also shortens the period for employers to respond to employee requests for pay information from two months to 14 calendar days.
Portugal
No transposition activity reported. Under the current rules, state-owned and publicly traded companies must prepare an annual equality plan with the objective of achieving equal pay between men and women. They must present an action plan for assessing any pay differences to the Inspectorate Service of the Ministry of Labour, Solidarity and Social Security, and implement the plan within one year.
Romania
No transposition activity has been reported. Under current legislation, employees’ salaries are confidential, and strict confidentiality agreements apply. Implementing the pay transparency directive will therefore require a significant cultural shift for both Romanian employers and employees.
Slovakia
Slovakia is moving to comply with the EU Pay Transparency Directive by introducing a standalone law on equal pay, updating related legislation such as the Labour Code and Employment Services Act.
The draft, published in September 2025 and expected to be enacted by June 2026, requires employers to disclose salary ranges in job postings, allows employees to request pay information for themselves and comparable colleagues, and mandates gender pay gap reporting for companies with 100 or more employees. If pay gaps exceed 5% without justification, employers must carry out joint pay assessments, and in discrimination claims, the burden of proof shifts to the employer. These measures aim to enhance transparency and reduce gender pay disparities in line with EU standards.
Slovenia
No progress on transposing the directive has been reported.
Spain
No transposition activity has been reported, though draft legislation appears to be in progress. Under existing 2021 legislation, companies with more than 50 employees must conduct regular remuneration audits, while smaller employers may do so voluntarily. All companies are required to maintain a remuneration register containing aggregated and disaggregated pay data, which employees can access via a workers’ representative or union member.
Sweden
In May 2024, Sweden became the first country to publish draft legislation implementing the EU Pay Transparency Directive, in the form of amendments to the existing Discrimination Act (Diskrimineringslagen), which is already largely aligned with the directive.
With a strong tradition of equality and a culture supportive of pay transparency, Sweden plans to exceed the directive’s requirements in several areas. For instance, employers must provide job candidates not only with salary information but also with the applicable collective agreement provisions before salary negotiations.
The most significant difference lies in reporting obligations. While the directive applies only to companies with 100 or more employees, Sweden intends to maintain its current requirements, which cover all companies with 10 or more employees.
Key Takeaways & Next Steps
The EU Pay Transparency Directive is more than a compliance exercise – it’s a catalyst for positive change in how organisations value, reward, and engage their people.
By now, it should be clear how important it is to prepare for the changes that are coming.
If you haven’t started yet, you need to start as soon as possible. And if you have, you need to make sure it’s been done well.
Immediate Actions for Companies
☑️ Audit your current pay structures and policies.
☑️ Implement or update job evaluation systems.
☑️ Design and document clear, objective salary bands and progression criteria.
☑️ Train HR, managers, and recruiters on the new rules and communication strategies.
☑️ Set up transparent communication channels for employees.
☑️ Prepare for regular reporting and data requests.
☑️ Review and strengthen your employer brand and recruitment processes.
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