Pay transparency: prepare your HR data before the law asks you to

What the directive changes, in practice

EU Directive 2023/970 on pay transparency, adopted in May 2023, was to be transposed by member states by 7 June 2026. Whatever the details adopted in each national law, which you should check in its final form, the substance of the obligations is known.

• Before hiring: candidates know the pay or the pay range for the position, and employers no longer ask about pay history.
• During employment: any employee can ask for the average pay level, broken down by sex, of workers doing the same work or work of equal value. Criteria for setting pay and pay progression must be objective and gender-neutral.
• Gap reporting: employers with at least 100 employees publish the gender pay gap periodically, by category of workers and by component of pay, on a timetable staggered by company size.
• The 5% threshold: a gap of at least 5% in a category, not justified by objective criteria and not remedied within six months, triggers a joint pay assessment with employee representatives.
• The burden of proof shifts: in a dispute, the employer must demonstrate the absence of discrimination.

What these obligations have in common: they assume structured, comparable and justifiable HR data. That is where most companies are not ready.

What your HRIS must be able to produce

The five data sets to secure

The real work: categories of workers

Gap reporting does not compare job titles, it compares categories of workers doing the same work or work of equal value. A category that is too broad hides gaps; one that is too narrow makes them meaningless and exposes individual pay. In between, you need a method.

Start from what exists

Your collective agreement classification, your benchmark jobs if you have them, your job evaluation grid: everything that already describes the work is a starting point. The goal is not to invent a nomenclature, but to write down the one you already apply, and fill the gaps.

Four criteria, written and weighted

Skills, effort, responsibility, working conditions: the directive requires objective and gender-neutral criteria. Writing them down for each category, with their weight, is what will let you justify a gap tomorrow, or recognise that it cannot be justified.

Carry the categories in the HRIS

Once defined, the category becomes an attribute of the position in the HRIS, updated at each position creation or change, not a file recalculated for every report. It is the only way to get a report that is reproducible from one year to the next.

Getting ready in five steps

1. Map payroll. Every pay code is attached to a component: base, variable, bonuses, benefits in kind, or excluded. Without this map, two people will calculate two different gaps.
2. Define the categories with the method above, validate them with employee representatives, carry the result into the HRIS.
3. Run a dry-run report on current data. It reveals the gaps, but also the data errors: unattached positions, missing sex, part-time not converted to full-time equivalent.
4. Analyse and document every category above the threshold: gap justified by objective criteria, or gap to correct, with a dated plan.
5. Tool what comes next: ranges per position in the reference data, answers to employee requests, decision history, a reproducible report.

The tools: HRIS, compensation module, or complement

General-purpose HRIS platforms are increasingly able to produce this report, provided the upstream data is clean: categories filled in, pay codes mapped, reliable working time. The compensation module of a Talent suite can carry the ranges and the decision criteria of pay campaigns. When the report requires crossing several payroll systems or several countries, a complementary tool connected to the HRIS, as described in this article, consolidates and traces the calculation. In every case, the tool comes after the method, never before.

Pitfalls to avoid

• Waiting for the implementing texts to start. Payroll mapping and categories take months; the texts will specify the format, not the substance.
• Comparing job titles. Two identical titles can cover work of different value, and vice versa.
• Calculating on base pay only. The gap is measured on all components, and variable pay is often what widens it.
• Treating it as an annual report. It is living data: every hire, every raise, every bonus changes it.

What you gain

Frequently asked questions

Where to start

Take your latest payroll file and try to attach every pay code to a component, then every employee to a category. What you cannot attach is exactly what the report will not be able to calculate. To frame the method or check what your HRIS can produce, let's talk.

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