Pay Transparency for Companies: Complete Checklist
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The Pay Transparency Directive hits Denmark in January 2027. Here is the complete checklist for preparing your company - whether you have 10 or 1,000 employees.
Checklist: Ready for January 2027?
Update all job postings with salary range
All new job postings from January 2027 must include a concrete salary range or starting salary. Review existing postings that are still active.
Remove pay secrecy clauses from contracts
Review all employment contracts and remove any clauses that forbid employees from discussing pay. These clauses are invalid from the directive's entry into force.
Establish a process for pay enquiries
Employees can demand to be informed of the average pay for their job category broken down by gender. You must respond within two months. Decide who in HR handles these requests.
Conduct an internal pay analysis
Map the pay structure broken down by gender and job categories. Identify unexplained pay differences and create a plan to address them - before you are required to report them publicly.
Document the pay criteria
Define and document the objective criteria that determine pay (experience, seniority, performance, responsibility). This is the documentation you will need if an employee challenges their pay.
What Happens in Case of Non-Compliance?
An employee only needs to make it plausible that pay discrimination has occurred. After that, the burden of proof is yours. If you cannot document that the pay difference is objectively justified, you risk:
- •Compensation to the discriminated employee for lost earnings
- •Scrutiny and fines from the Board of Equal Treatment
- •Reputational damage if the case becomes public
Do you need market data for your pay analysis?
LønRadar can help your company benchmark salaries against the market. Contact us to learn about our business solutions.
Contact usFrequently asked questions
What are the most important things to have in order before January 2027?
The three most important points are: 1) Salary or salary range in all job postings, 2) Delete or revise pay secrecy clauses in contracts, 3) Establish a process for responding to employees' pay enquiries within 2 months.
Should we conduct a full pay analysis now?
It is recommended. An internal pay analysis before the directive takes effect gives you the opportunity to identify and correct any unexplained pay differences before you are required to report them publicly.
What does compliance cost?
The ongoing costs are primarily for HR administration and any pay adjustments. However, fines and compensation for non-compliance can significantly exceed the preventive investment.
Do the requirements also apply to international companies with employees in Denmark?
Yes. All companies with employees in Denmark are covered, regardless of domicile. It is the employees' place of work that determines which legislation applies.