Five ways to make the most of transposition delays

No. Even where there’s no specific timeline for transposition, some legislators might enact stopgap measures at short notice. For example, Germany may follow this approach. Others, such as Spain, Portugal or Hungary, may release a draft and then final transposition in rapid succession, leaving companies with little time to react.

No. Even if the legislation is delayed, regulators may still stick to the original June 2027 reporting timelines. Reporting includes pay gap disclosures likely to face the greatest level of scrutiny. 

Moreover, waiting could lead to a rush to get your data ready further down the line. You would also have less time to justify or amend previously undetected gaps. 

It’s a grey area. Technically, this kind of EU directive needs to be enacted in national legislation before it becomes binding. But in the absence of an official delay from the European Commission, an employee or their representative could still lodge a challenge in a local court of law or the European Court of Justice. Whether or not the court deems the Directive to be binding, denying a request for information or contesting an equal pay challenge may still be reputationally damaging. Employees in territories where the EU PTD has been passed into law may also use a claim elsewhere as a cue to make their own legal claims.

No. There are indeed differences of interpretation in different EU member states. Nonetheless, it still makes operational and pragmatic sense to put in place a strong organisation-wide job architecture to bring together peer groups doing the same work or work of equal value, along with a consistent approach to analysing pay gaps and pay structures. Leaving decision-making in these core areas to small local teams increases the risk that your grouping and justifications will be vulnerable to challenge from employee representatives, regulators, and even your own managers and employees. 

Pay philosophy

The starting point is agreeing and articulating your pay philosophy (sometimes referred to as ‘pay approach’). How is pay structured in your organisation? What can employees expect? What part does fairness and transparency play within this overall approach? Where can employees easily find this information?

Job architecture

Your job architecture is the baseline for pay evaluation. By mapping job titles, responsibilities, and required skills, you can gauge, equate, and categorise ‘work of equal value’ across your organisation, even if the job descriptions are different.

You can also ensure ‘work of equal value’ evaluations are gender neutral. Notably, this includes stripping out the market rates of pay for roles in fields traditionally dominated by higher paid men. 

A robust job architecture will help to identify the data you need to collect and compare. It will also help to make sure that your governance and reporting stand up to scrutiny by demonstrating that pay is underpinned by an objective, gender-neutral framework.

For some organisations, the kind of job architecture needed for the EU PTD needs to be built from scratch—even in a relatively small group, this can take several months. Others will have a lot of the necessary basics in place but may need to add further elements to meet the demands of the EU PTD in areas such as equitable working conditions (e.g. hazards or unsociable hours).  

Data 

Identify, map, and start sourcing the data you need.

The EU PTD’s data demands are extensive and complex. It’s unlikely that you’ll be able to pull all the information out from a single system.

Whether your approach to data collection and analysis should be consistent across the organisation or vary between countries depends largely on your group structure. Is it centralised or devolved? What level of resources is available locally?

Some level of centralised coordination and audit will be necessary to ensure that reporting is based on reliable and comparable data. Smaller and less well-resourced local teams will also benefit from guidance and support, at least initially. 

However, the EU PTD is interpreted and enacted in local legislation, new rules on pay disclosure for candidates are certain to be a key element. 

You’ll need to disclose the starting salary or a salary range, instead of asking for current or desired pay and basing your offer on that. This will likely change pay negotiations, so recruiters need to be prepared. 

The new approach also offers clear benefits. Candidates will enter the interview process with an understanding of what salary to expect. This would help filter out applicants with incompatible expectations and allow recruiters to focus more time on high potential interviewees. 

Preparing now will not only make sure that recruiters are up to speed but also get an early mover advantage in attracting and hiring quality candidates. 

Running pilots in the markets that went live in the first round, such as Italy, Lithuania, or Slovakia, allows you to test systems and identify sections of the workforce who are being paid unfairly. 

This better positions you to iron out any deficiencies in these countries and eventually across your EU operations. These pilots can make a crucial difference when it comes to understanding your data needs and what more you have to do to meet them. You can also monitor how employees respond to the new openness on pay and gather feedback from managers, HR, and other key stakeholders.

With your job architecture and data analysis to hand, you can begin to calibrate and investigate potential gaps in pay.

In some cases, there may be a justification in areas such as experience or unsociable hours. If not, you can either bridge the gap straight away or set out a roadmap for addressing it.

With managers and employees as well as HR wondering what’s going to change and how it will affect them, it’s important to start communications now.

The headline message is that the EU PTD is coming and there’s going to be a lot more openness about what employees are paid and why.

You can then develop targeted communications for employees, managers, recruiters, and leaders. This should not only look at new responsibilities but also consider opportunities in areas such as helping people to develop the skills they need to boost their career potential and pay. 

The earlier you start talking about pay transparency, the more you can highlight what you already do and why you see transparency and fairness as core elements of your pay philosophy and EVP.