Pay Transparency: How to Anticipate the Transposition of Directive (EU) 2023/970

  • Analysis
  • Employment & labour law
16.03.2026

Directive (EU) 2023/970 of 10 May 2023 aims to combat pay gaps between women and men by addressing information asymmetry.

Current French law requires employers to ensure equal pay between women and men, in accordance with the principle of ‘equal pay for equal work’1 . It also requires companies with at least 50 employees to publish a gender equality index2 .

The Directive introduces three major new obligations for employers (I), the implementation of which must be anticipated in order to avoid future litigation (II).

I. New Obligations for Employers

The European Directive aims to ensure pay transparency for job applicants and employees, as well as transparency regarding pay gaps within the company.

Pay transparency for the benefit of job applicants and employees

Before hiring1 : The employer may no longer ask candidates for their previous pay history and must provide them with the initial pay or pay range corresponding to the position, based on objective and non‑gender‑biased criteria, and, where applicable, the provisions of the applicable collective bargaining agreement.
After hiring2 : The Directive requires employers with more than 50 employees to make available to their employees, in writing, for categories of workers performing the same work or work of equal value and broken down by sex:

the criteria used to determine their remuneration
the average remuneration levels
the progression of remuneration

The employer must remind employees of this right to information at least once a year.
This will mechanically lead to new employee requests, to which the employer will have to respond by preparing an individualized document for the requesting employee, within a maximum of two months from the date of the request.
The employer must be transparent about the criteria used for setting and progressing pay, which must necessarily be “objective and non‑gender‑biased.”
For many organizations, this means formalizing what has sometimes been implicit (bonuses, variable pay, promotions, performance criteria, market benchmarks, etc.) and making these rules understandable, traceable, and justified.

  • For many organizations, this means formalizing what has sometimes been implicit (bonuses, variable pay, promotions, performance criteria, market benchmarks, etc.) and making these rules understandable, traceable, and justified.

Company‑Level Transparency on Pay Gaps

The text also provides for the communication of data relating to the pay gap1 between female and male workers to the public, except for the last criterion, which will be accessible only to employees, their representatives, the labor inspectorate, and the equality body, given its sensitivity.

The data identified are as follows:

  1. the pay gap between women and men;
  2. the pay gap between women and men regarding variable or complementary pay components;
  3. the median pay gap between women and men;
  4. the median pay gap between women and men regarding variable or complementary pay components;
  5. the proportion of female and male workers receiving variable or complementary pay components;
  6. the proportion of female and male workers in each quartile;
  7. the pay gap between women and men by categories of workers, broken down by basic ordinary salary or pay and by variable or complementary components.

This obligation is expected to apply from 7 June 2027 for companies with more than 150 employees, with an annual reporting frequency for those with fewer than 250 employees, and a three‑year frequency for those with more than 250 employees.

For employers with between 100 and 149 employees, the obligation will apply from 7 June 2031, with a three‑year reporting frequency.
Whether to impose this obligation on companies with fewer than 100 employees is left to the discretion of Member States.
Corrective measures will be required where the gap exceeds 5%.

II. Issues to Anticipate in Order to Avoid Future Litigation

Preparatory work ahead of the transposition is necessary for companies in order to anticipate and avoid new litigation.

Preparatory work ahead of the transposition

The deadline for transposition into French law is set for 7 June 20261 . The final consultation meeting with the social partners will take place on 19 March 2026.
This transposition will provide France with an opportunity to review the existing criteria of the current gender equality index.

To facilitate the implementation of this new equality index, the Ministry of Labour has indicated that the application of the new criteria may be automated for at least 6 out of the 7 indicators (with the exception of the pay gap between women and men by category of workers), via the DSN, so that companies can focus not on “data compilation” but rather on improvement areas and corrective actions to be taken.
In any case, this deadline requires significant preparatory work for HR Departments, particularly regarding the adjustment of HR/payroll systems, comparison categories, and internal processes for responding to information requests.

Some workstreams can already be anticipated while awaiting the transposition: pay mapping, job classification, variable pay, salary review processes, and data governance.

Moreover, the Directive will require employers to reflect on mechanisms for job grading, promotions, bonus allocation, and the balance between internal equity and external competitiveness.

  • Regarding remuneration policy: The requirement for objective and non‑gender‑biased criteria will require a revision of the documentation for fixed and especially variable pay policies (salary grids, pay bands, performance criteria, bonus allocation rules, bonus eligibility conditions, increase mechanisms, promotions).
  • Regarding social dialogue: Pay transparency will heighten the importance of classifications, progression criteria, and comparison methods—topics that are particularly sensitive in industrial relations. The most effective approach is to gradually integrate the Directive into ongoing negotiations (remuneration, gender equality, workforce and career management), rather than treating it as an isolated project.
  • Regarding employer attractiveness and employer branding: Pre‑hire transparency requires aligning communication and reality. For the employer, this becomes a factor in attraction and retention, but also a reputational risk in the event of poorly managed communication or misinterpreted data.
  • Regarding personal data protection and GDPR:
    The Directive leads to an increase in the processing of remuneration data, which constitutes personal data under the GDPR. Employers must therefore reconcile pay transparency with GDPR compliance to prevent data breaches in addition to social risks.

In practice, employers should set themselves a simple objective for the transposition deadline: to be able to (i) explain remuneration rules, (ii) produce reliable indicators (including variable pay), (iii) process information requests through a standardized process, and (iv) correct unjustified gaps with proper governance and planning.

Timing is therefore crucial: starting early allows gaps to be addressed proactively rather than under pressure, at a time when information requests and publication requirements will increase.

  • Some workstreams can already be anticipated while awaiting the transposition: pay mapping, job classification, variable pay, salary review processes, and data governance.

To avoid new litigation

Under French law, the burden‑of‑proof framework is well established: the employee presents facts that give rise to a presumption of discrimination; the employer must then prove that the difference is based on objective elements unrelated to any discrimination.

The Directive1 introduces additional mechanisms enabling employees to assert their rights under the principle of equal pay:

  • judges may order the employer to produce any relevant evidence in its possession, including confidential information;
  • judges may instruct the employer, under penalty payments, to put an end to the violation of the principle of equal pay and to take measures to ensure its application;
  • the burden of proof will be adjusted between the employee alleging discrimination and the employer. Where an employer has failed to comply with its obligation to provide information on pay transparency, it will be for the employer to prove that no discrimination occurred or that any breach of its obligations was unintentional and minor;
  • the compensation or redress for the employee must include full recovery of back pay and any related bonuses or benefits in kind, missed opportunities, moral damages, any harm caused by other relevant factors, and late‑payment interest. It cannot be capped.
  • Companies should expect an increased risk of pay discrimination claims due to this easier access to remuneration information.

Finally, from a managerial perspective, in a context of increasing requests for information on remuneration, any poorly handled reaction could trigger litigation based on the prohibition of retaliatory measures against employees who have reported or testified about discriminatory acts2 .

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