Navigating the EU Pay Transparency Directive with Job Evaluations

Pay transparency has long been a topic of debate in the business world. Is it an invasion of privacy, or is it a necessary step to ensure fair and equitable compensation? At its core, pay transparency involves openly sharing salary and benefits information with employees and prospective job candidates. With its goal of promoting fairness, equity, and informed decision-making, this shift will impact every organization.

The entry into force of the EU Pay Transparency Directive was in 2023 and EU member states are expected to implement the requirements into their national law as from July 2026. This means that employers will soon be required to disclose salary ranges before candidates even apply for a role, along with providing employees access to clear pay structures. Additionally, organizations with 100 or more employees will have to report on gender pay gaps, and those with significant disparities will need to take corrective action.

The Role of Job Evaluation in Pay Transparency

With this regulation fast approaching, companies need to move beyond simple salary disclosures. Job evaluation is a cornerstone of compliance with the Directive. By systematically assessing roles based on responsibility, skills, and impact – rather than personal characteristics – businesses can establish a structured, fair approach to pay.

Without a robust job evaluation framework, organizations risk pay discrepancies that could lead to compliance issues, fines, employee dissatisfaction, and even reputational damage.

Job evaluation will provide organisations with the foundation to:

• Define fair and transparent pay structures
• Justify differences in pay based on objective criteria
• Ensure compliance with the directive while maintaining flexibility in rewarding employees

The Balancing Act: Transparency vs. Business Considerations

While pay transparency aims to close pay gaps and increase fairness, it also presents challenges. Employees will have greater access to salary information, which may lead to internal comparisons and negotiation pressures. At the same time, businesses must ensure that transparency does not result in talent poaching or rigid pay structures that limit flexibility in rewarding performance.

This is where remuneration bands linked to job evaluation come into play. Instead of fixed salaries, companies can establish pay ranges for each role, allowing room for performance-based differentiation while maintaining compliance with the directive.

Preparing for 2026: The Time to Act is Now

The shift towards pay transparency is inevitable, and organizations must start preparing now. By proactively implementing job evaluation frameworks and refining pay structures, companies can ensure compliance, enhance trust, and build a fairer workplace for all.

We have years of experience conducting job evaluations and guiding businesses through compensation strategies. If you’d like to discuss how to prepare for the upcoming directive, reach out to us today.