EU: The Pay Transparency Directive

Ireland has yet to transpose the Pay Transparency Directive. Experts question its impact, arguing gender pay gaps exist mainly between, not within, job categories.

The key points: Ireland, like most EU Member States, has not yet transposed the Pay Transparency Directive, which requires joint pay assessments where unexplained gender pay gaps exceed 5% within job categories. There is concern that the Directive may prompt the creation of new worker representative structures.

Why this matters: While the Directive aims to address gender pay gaps, its focus on gaps within categories may not tackle the main sources of pay inequality, which often exist between categories or occupations. This could lead to disappointment among stakeholders expecting broader impact.

Our view: This Directive is going to be a disappointment to many. Why? Because we are not persuaded that there is any great amount of gender pay discrimination within categories of workers. The gap arises between categories and between occupations. But that is not the focus of the Directive. The directive is ask the wrong question, and so it will not get the right answer.

What might happen next: Ireland and other Member States will develop national legislation to implement the Directive by June 2026. There may be further debate about its effectiveness and the potential for new workplace representation requirements.

What you should be doing: Monitor the national transposition process and review your pay structures. Prepare for joint pay assessments and consider the implications of possible new requirements for worker representation.

Tom explores this issue in greater depth in this recent Substack