With only thirteen weeks remaining before the EU Pay Transparency Directive (the Directive) comes into force, pay transparency is becoming a central focus for Organisations across Ireland.
The broad aims of the Directive are to ensure Employers adopt fair gender-neutral compensation practices and take action to identify any compliance gaps. Some of the most impactful changes that will affect all Organisations include:
- Pay transparency for job applicants
- An Employee right to access pay information,
- A prohibition on pay secrecy clauses.
Below, we outline the key rights that Employees and job applicants will acquire under the new regime which will impact all Irish Organisations regardless of headcount.
Pay Transparency Pre-Employment
Article 5 of the Directive provides job applicants with a right to receive the following information from a prospective Employer:
- the initial pay or its range, based on objective, gender-neutral criteria, to be attributed for the position concerned; and
- where applicable, the relevant provisions of the collective agreement applied by the Employer in relation to the position.
This information must be provided to job applicants in a manner that ensures an informed and transparent negotiation on pay. The Directive provides that job advertisements may be used as a means to comply with this provision but it is open to Organisations to decide how they comply with this requirement so long as the applicant receives the relevant information prior to the job interview.
In addition, to ensure there is a fair negotiation on pay, Organisations are prohibited from asking job applicants about their pay history during their current or previous employment relationships.
What This Means in Practice
These requirements will impact existing recruitment processes. Organisations will need to review their approach to interviews and job advertisements to ensure compliance with the new pay transparency measures.
Preparatory Steps
Preparatory steps to ensure compliance could include:
- Confirm Position on Pre-Employment Pay Information Compliance: While job advertisements may be used to provide applicants with the salary range or initial pay level for a vacancy, it is open to Organisations to decide how they comply with this requirement so long as the applicant receives the relevant information prior to the job interview.
- Job Advertisements: Review any pay and salary information that is included in job advertisements to ensure it is based on gender neutral criteria for the position concerned.
- Interview Processes and Questions: Review recruitment and interview processes to ensure candidates are not asked questions about their current or historic salaries.
Employee Right to Access Pay Information
Article 7 of the Directive sets out that Employees shall have the right to request and receive in writing, information on their individual pay level and the average pay levels, broken down by sex, for categories of workers performing the same work as them or work of equal value to theirs.
What This Means in Practice
In practical terms, compliance tasks facilitating this new Employee right include:
- Identifying categories of Employees carrying out work of equal value.
- Responding in writing to an Employee request for pay information within two months.
- Preparing to deal with Employee requests made through their representatives or through an equality body (transposing legislation required to confirm details of this form of request).
- Diarying an annual reminder to Employees concerning this right to pay information and how it can be exercised.
Preparatory Steps
Preparatory steps for compliance could include:
- Categorisation of Employees: ‘Categories of workers’ includes not only Employees performing the same role but also roles of equal value. In practice, this means that two roles which appear quite different may be considered work of equal value when analysed against objective criteria like qualifications, skills, effort and decision making. Organisations will need to establish methodologies to guide the assessment of work of equal value. Preparation could begin by mapping out work of equal value using the criteria set out in the Directive which include skills, effort, responsibility and working conditions. Given that a response to Employee requests is required within two months, Organisations may need to establish a system for promptly collecting and reporting the relevant pay data required by the Directive. This may involve upgrading HR information and payroll systems to ensure accurate and comprehensive data collection.
- Communication and Training: It may be worthwhile to develop a communication strategy to inform Employees about their pay information rights. Managers and HR staff may also need training on handling pay transparency inquiries effectively and respectfully.
- Annual Reminders: Employers must remind Employees, on an annual basis, of their right to receive the relevant pay information and of the steps required to exercise that right. Organisations should consider the timing of this annual reminder and how to deal with a large volume of requests that may follow on from the reminder.
Prohibition on Pay Secrecy Clauses
Article 7 also provides that Employees shall not be prevented from disclosing their pay for the purpose of the enforcement of the principle of equal pay. In effect, pay secrecy clauses that restrict Employees from disclosing information about their pay will be prohibited.
What This Means in Practice
Employers will no longer be permitted to include a contractual obligation prohibiting Employees from disclosing their pay. It is notable that the Directive prohibits pay secrecy that obstructs the enforcement of the principle of equal pay. It would follow that Employers will still be able to prohibit Employees from making general disclosures of pay levels that are not connected to the enforcement of the principle of equal pay.
Preparatory Steps
Review employment contracts to see if they include pay secrecy clauses and ensure that any such clauses are either amended or removed before the new pay transparency obligations come into effect in June 2026. It seems likely that clauses which limit Employees to making pay disclosures required for the enforcement of the principle of equal pay will be compliant.
How Adare can help
Being prepared for new pay transparency rights for the EU Pay Transparency Directive requires more than a policy update, it requires confidence in your pay structures, your pay data and your decision-making processes.
We support Irish Organisations by:
- Assessing readiness for Employee pay information requests
- Supporting the development of clear job architecture and role categorisation aligned with ‘work of equal value’ principles
- Reviewing pay structures, pay ranges and progression frameworks to ensure they are objective and defensible
- Conducting pay risk and equal pay assessments ahead of Employee requests
- Advising on practical processes for responding to pay information requests clearly, consistently and compliantly
- Supporting HR and leadership teams with guidance, training and communications as pay transparency obligations evolve
Adare is a team of expert-led Employment Law, Industrial Relations and best practice Human Resource Management consultants. If your Organisation needs advice, support, or guidance about pay transparency compliance requirements or any HR issues, please contact Adare by calling (01) 561 3594 or emailing info@adarehrm.ie to learn what services are available to support your business.