The EU Pay Transparency Directive represents a pivotal shift in how organisations must approach pay equity. Designed to close the gender pay gap and promote fairness in compensation, the Directive introduces a suite of obligations that will significantly impact HR practices. While Ireland has until June 2026 to transpose the full Directive into national law, the Gender Pay Gap reporting element is already underway and proactive preparation for other elements is essential. This article outlines the key fundamentals of the Directive and offers practical advice for HR professionals navigating the upcoming changes.

Pay Transparency Before Employment
One of the Directive’s cornerstone provisions is the requirement for transparency in pay before employment begins. Employers must disclose the initial pay level or pay range for a position to prospective candidates. This information should be based on objective, gender-neutral criteria and must be shared in a way that enables candidates to make informed decisions—such as in job advertisements or during early stages of the recruitment process. While employers and applicants can still negotiate outside the published range, the emphasis is on openness and fairness from the outset.

Prohibition on Pay History Questioning
To prevent perpetuation of historical pay inequalities, the Directive prohibits employers from asking candidates about their current or previous salaries. This measure ensures that compensation offers are based on the role’s value and the candidate’s qualifications, rather than being rooted in potentially discriminatory past earnings.
Irish Legislative Developments

The General Scheme of the Equality (Miscellaneous Provisions) Bill 2024, published in January 2025, outlines how Ireland intends to implement Article 5 of the Directive. It proposes that salary ranges be included in job advertisements.  This is marginally ahead of the Directive’s minimum requirements. The bill also re-iterates the ban on questions around a candidate’s pay history. These legislative steps, whilst still a work in progress, signal Ireland’s commitment to embedding transparency into recruitment practices.

Gender Pay Gap Reporting
The Directive mandates annual gender pay gap reporting. This is now in place in Ireland for employers with more than 50 employees. This requirement applies to all sectors—public, private, and voluntary—and includes employees working abroad if they are remunerated by the Irish entity.  Reports must include a breakdown by employment category, offering a detailed view of pay equity across the organisation. Employers must publish this data within five months of their chosen snapshot date. The snapshot date must fall during the month of June 2025.  To calculate gender pay gap metrics, employers should start by identifying all employees on the snapshot date and collecting data on their ordinary pay, bonuses, benefits in kind, and total working hours. Hourly remuneration is calculated using this data.  As defined in the Employment Equality Acts 1998-2021, "remuneration, in relation to an employee, does not include pension rights but, subject to that, includes any consideration, whether in cash or in kind, which the employee receives, directly or indirectly, from the employer in respect of the employment". Ordinary pay includes allowances and statutory leave top-ups but excludes reimbursements for business-related expenses. Reporting must be in Euros and calculated before deductions. 

Employee Rights to Pay Information
Employees will have the right to request information about their own pay and the average pay levels of colleagues performing comparable work, broken down by gender. Employers must respond within 60 days. This provision empowers employees to identify and challenge unjustified pay disparities, reinforcing internal accountability.
Addressing Pay Inequality

The Directive introduces several mechanisms to address pay inequality. First, it shifts the burden of proof in pay discrimination cases to the employer, requiring them to demonstrate that no discrimination occurred rather than the burden of proof being on the employee. Secondly, it entitles affected employees to full recovery of back pay—without caps—if discrimination is proven. Thirdly, if a gender pay gap of 5% or more is identified and persists for six months, employers must conduct a joint pay assessment with employee representatives to investigate and resolve any gaps that cannot be objectively justified.

Practical Steps for HR Professionals
Notwithstanding that Gender Pay Gap Reporting is the current and most pressing requirement for most organisations, you should also be now preparing for the 2026 Pay Transparency requirements as outlined above. You should begin by conducting a comprehensive review of current pay structures and recruitment practices. Key actions include:
- Reviewing remuneration, grading structures and progression policies to identify potential disparities.
- Defining and documenting categories of workers for reporting purposes.
- Updating data management systems to handle pay transparency requests efficiently.
- Running internal gender pay gap analyses and developing action plans to address any issues.
- In addition, employers will have to provide a gender neutral and easily accessible description of the criteria used to determine pay levels and pay progression to their employees.

Conclusion
The EU Pay Transparency Directive is more than a compliance obligation—it’s an opportunity to build a more equitable and transparent workplace. By taking early action, HR professionals can not only ensure readiness for the Directive’s implementation but also foster a culture of fairness and trust. Staying informed about legislative developments and embedding transparency into everyday practices will be key to navigating this evolving landscape successfully.