Everything You Need to Know About the EU Pay Transparency Directive
Last updated:
On 10 May 2023, the EU adopted a directive that bans pay secrecy. It requires transparency around pay for new positions and gives employees the right to see what their colleagues earn on average.
From 7 January 2027, it applies in Denmark. Here is how it affects you.
What is the Pay Transparency Directive?
EU Directive 2023/970 is an equal pay directive. Its purpose is to close the gender pay gap by making pay structures visible - in job postings, internally within companies, and in public reports.
It is not a directive about publishing everyone's individual salary. It is about systems and structures - can you see whether your company systematically pays one gender less than the other?
The answer must from now on be yes.
The Five Core Requirements
1. Salary in job postings
Companies must disclose the salary range for new positions. Applicants are entitled to know the salary range before the interview. It may be stated in the job posting or communicated directly to the applicant.
2. Ban on pay secrecy
Employers may not contractually oblige employees not to discuss their pay. Existing pay secrecy clauses are invalid.
3. Right to pay information
Employees can request to be informed of the average pay for their job category broken down by gender. The employer must respond within two months.
4. Pay reports (100+ employees)
Companies with 100 or more employees must publish regular pay reports showing gender-based pay differences. Starting in 2027 for large companies.
5. Reversal of burden of proof
If an employee complains of pay discrimination, it is the employer who must prove that no discrimination occurred - not the employee who must prove that it did.
Timeline for Denmark
| Date | Event |
|---|---|
| 10 May 2023 | EU adopts Directive 2023/970 |
| February 2026 | Danish bill introduced |
| 7 January 2027 | Implementation deadline - law applies in Denmark |
| 2027 | First pay reports from companies with 150+ employees |
| 2031 | Pay reports required from companies with 100-149 employees |
What Happens if You Violate It?
Employers who fail to comply risk compensation claims from affected employees. The Board of Equal Treatment can conduct audits and impose fines.
The most important change is the burden of proof. It is sufficient for an employee to make discrimination plausible - then the employer must disprove it.
Read More
Know your market value
Use your new rights with data in hand. LønRadar gives you a free personalised salary report based on verified payslips from your industry.
Get your free salary reportFrequently asked questions
When does the Pay Transparency Directive take effect in Denmark?
EU Directive 2023/970 was to be implemented in Danish law by 7 January 2027. The Danish bill was introduced in February 2026 and is expected to be passed before the deadline.
Who does the directive apply to?
The directive applies to all employers in Denmark, regardless of size. The stricter requirements for pay reports apply primarily to companies with 100+ employees. The requirement to disclose salary ranges for new positions applies to all.
What are the consequences of non-compliance?
Employers who violate the directive may be ordered to pay compensation to affected employees and may face scrutiny from the Board of Equal Treatment. The burden of proof shifts to the employer in cases of alleged pay discrimination.
Does the directive only apply to women and men?
The directive is about equal pay across genders - it is primarily an equality instrument. But the right to pay information applies to all employees regardless of gender.