Ireland is preparing to incorporate the requirements of the EU Pay Transparency Directive 2023/970 ("the Transparency Directive") into national law. Ireland is obliged to transpose the Transparency Directive into Irish law by 7 June 2026. The purpose of the Directive is to strengthen the principle of equal pay for equal work between men and women through introducing new EU rules on pay transparency.
About the Directive
Under the new rules, EU companies will be required to share information on salaries. If a company's gender pay gap exceeds 5%, employers must conduct a joint pay assessment with worker representatives and create an action plan to address it. The directive also provides for compensation for victims of pay discrimination and penalties, including fines, for employers who breach the Transparency Directive.
Companies with more than 50 employees will be required to report annually on the gender pay gap in their organisation to the relevant national authority. There will be no reporting placed on organisations with less than 50 employees. This is in addition to current gender pay gap reporting obligations.
Under the new Directive, workers who have suffered gender pay discrimination can be awarded compensation, including full recovery of back pay and related bonuses or payments in kind. These protections will also extend to prospective employees and those applying for employment. Employees and prospective employees will have to issue claims in the Workplace Relations Commission (WRC) to avail of these reliefs.
The new reporting requirements under the EU Directive are as follows:
- Employees will have the right to receive information on their individual pay level and the average pay levels, broken down by sex, for the categories of workers performing the same work as them or work of equal value to theirs
- Employers must remind staff of their right to this information annually
- Reporting must be completed by companies with 50 or more employees
- Companies must disclose pay ranges in job ads
- Companies are prohibited from asking about salary history
- Companies cannot include pay secrecy clauses in contracts
- If a gender pay gap of 5% or more is found, employers must conduct a joint pay assessment with worker representatives and create an action plan to address it
- There is a shift in the burden of proof in pay discrimination cases
While the burden of proof in pay discrimination cases has traditionally fallen on the employee, under the directive, the employer must prove that they have not violated EU rules on equal pay and pay transparency. Penalties for violations must be effective, proportionate, and dissuasive and will include fines. The penalties are yet to be determined by Member States, including Ireland.
Status of Irish legislation
The requirements of the Directive are being introduced in Ireland through the Remuneration Information and Pay Transparency Bill 2023 and the Equality (Miscellaneous Provisions) Bill 2025. Both these Bills have yet to be ratified.
Key changes for employers
The key change for employers will be the additional layer of reporting on top of existing gender pay gap reporting. Employers will now be required to report on the gender pay gap between "categories of workers" performing equal work or work of equal value, based on both basic and variable pay. This data must also be made available to employees upon request.
Another major development is the mandatory action required when a gender pay gap of 5% or more is identified. Employers must carry out a joint pay assessment with worker representatives and develop an action plan to address the gap — a step not currently required under Irish law.
The Directive will also impact recruitment practices, requiring changes to job advertisements, interview processes, and employment contracts to ensure compliance.
What should employers be considering?
As the transposition deadline approaching, we would advise employers to do the following in preparation:
- Conduct a pay audit, gathering information on all forms of remuneration for every employee including basic pay, bonuses, benefits, in-kind benefits, and overtime
- Ensure you have up-to-date information regarding the gender breakdown of employees
- Identify the “categories of workers” and “work of equal value” as set out in the Directive
- Conduct a “dry run” gender pay gap analysis
- Review and update recruitment practices, including job advertisements and interview questions relating to prior salaries
- Review pay-setting and progression criteria and plans and ensure that they comply with the Directive
- Prepare for employee information requests by developing a clear internal process for dealing with them
- Review and update employment contracts and policies to ensure they align with the Directive
We can help you prepare for the EU Pay Transparency Directive being implemented. Get in touch with our experts for further advice.
