What does the EU Pay Transparency Directive require and when do employers need to comply?

The EU Pay Transparency Directive (EU 2023/970) introduces a set of mandatory transparency, reporting, and employee information rights that employers must support across recruitment, pay governance, and gender pay-gap oversight. The Directive must be transposed into national law by June 2026, with reporting obligations phased in from 2027 based on workforce size.

Key requirements include:

Recruitment Transparency

• Salary ranges must be included in job postings and requisitions
• Employers cannot ask candidates about salary history
• Job postings must reflect gender-neutral criteria

Employee Information Rights

• Employees can request their individual pay level
• Employees can request average pay levels of comparable colleagues, broken down by gender
• Employers must respond within defined national timelines

Gender Pay Gap Reporting

• Annual or triannual reporting based on organisation size
• Reporting must cover base pay, bonuses, and variable pay
• Reports must be shared with employees and published in line with national rules

Action When Gaps Exceed 5%

• Employers must analyse causes of the gap
• If no justification exists, corrective measures must be taken
• Some countries may require a joint pay assessment with worker representatives

Record-Keeping & Evidence

• Employers must maintain audit-ready documentation
• Reporting must be consistent, explainable, and supported by reliable data structures

Timelines & Deadlines

EU-wide

• Member States must implement the Directive by 7 June 2026
• Organisations must comply according to national versions of the law

Reporting thresholds (likely phased across most Member States):

• 250+ employees: Report annually
• 150–249 employees: Report every 3 years
• 100–149 employees: Reporting to begin later (likely after 2031)

Note: individual Member States may accelerate timelines or add additional requirements.

Country-by-Country Variations

• National laws may introduce different templates, thresholds, or reporting frequencies
• Deadlines for employee information requests may vary
• Some countries may include stricter remediation expectations

Penalties

• Non-compliance can lead to financial penalties,
• Requirements for corrective actions,
• And potential exposure to employee claims based on lack of transparency.

SAP SuccessFactors provides native capabilities that support EU Pay Transparency requirements, including pay-range visibility in Recruiting, structured job and pay frameworks in Employee Central, comparator and gender pay-gap reporting in People Analytics Stories, workflow automation through Alerts and HR Service Delivery, and optional AI features such as Explain My Pay and Joule Studio skills. These tools form the technical foundation for transparent and governed pay processes.

Key features include:

• Recruiting: pay ranges in requisitions and postings, offer guardrails
• Employee Central: job architecture, grades, and pay ranges
• People Analytics Stories: comparator data, gender pay-gap insights
• Workflows: Alerts, HRSD cases, and Task Center actions
• AI (Optional): Explain My Pay and Joule Studio skills
  Activating and configuring these capabilities ensures your environment can support Directive-aligned transparency and reporting.

The roadmap is Zalaris’ proven 90-day model for enabling pay transparency using native SAP SuccessFactors functionality. It includes:

• 0–30 Days (Foundations): data review, job and pay structures, Recruiting templates, baseline reporting
• 31–60 Days (Automate): workflows, Alerts, comparator dashboards, guardrails
• 61–90 Days (AI + Scale): Explain My Pay, Joule skills, KPIs, multi-country readiness
  This structure ensures a clear, phased approach to activating transparency across systems, processes, and reporting.

This package delivers the essential SAP SuccessFactors structures required for EU Pay Transparency, creating a reliable foundation for pay-range visibility, gender pay-gap reporting, and scalable transparency processes.

From pricing includes:

• One-country SAP SuccessFactors configuration to support EU Pay Transparency requirements
• Delivered using a nearshore resourcing model
• Activation of core transparency features across Recruiting, Employee Central, and People Analytics
• Configuration aligned to your existing system landscape and pay-data structures
• Establishes the baseline needed for transparency reporting and future automation
• SAP SuccessFactors licensing not included
• Actual costs may vary based on scope and delivery model

Most organisations can support EU Pay Transparency using the SAP SuccessFactors modules they already have. Core capabilities typically come from Recruiting, Employee Central, and People Analytics (Stories) — which enable pay-range visibility, structured job and pay data, and baseline gender pay-gap and comparator reporting.

Some organisations may require configuration enhancements, extended data structures, or integration with external payroll systems to ensure complete and accurate reporting. Optional features such as HR Service Delivery, Explain My Pay (ECP), and Joule Studio skills can further strengthen automation and employee transparency.

Zalaris reviews your current landscape and activates the modules and features needed to support Directive-aligned transparency based on your system maturity and country requirements.