Balancing Pay Equity across Europe: EU Pay Transparency in Focus
As businesses across Europe prepare for a transformative shift in how they manage and report pay data, Neil Fromow’s Workday session at HR Technologies London 2025 offered vital insight into the European Union Pay Transparency Directive (EUPTD) — what it means, how to respond, and where technology fits in.
What is the EU Pay Transparency Directive?
The EUPTD is not yet law, but it is a legally binding directive across EU member states — with powerful implications for gender pay equity. The directive’s main goal is clear: eliminate unjustified pay gaps between men and women doing work of equal value. Though the principle of equal pay has existed for decades — famously spotlighted in the 1970 Ford Dagenham strike — enforcement has remained inconsistent.
The EUPTD aims to change that through enforceable mechanisms and transparency-focused strategies. Key pillars include:
- Reporting provisions for employers.
- Rights to information for employees and job applicants.
- Employer prohibitions on pay secrecy.
Who Needs to Comply — and When?
Compliance isn’t optional. All companies operating in EU member states — even non-EU registered firms — will need to act if they meet certain thresholds:
- 150+ employees by 2027
- 100+ employees by 2031
Crucially, all companies, public or private, must respect the rights to pay information and transparency. Member states must implement local legislation by 7 June 2026, with the first reporting period running from 1 January to 31 December 2026.
Four Core Focus Areas for Employers:
- Gender Pay Gap Reporting
Companies must report wage disparities between men and women, offering clear metrics and explanations. - Mandatory Joint Pay Assessments
If a gap over 5% can’t be justified, employers may be required to conduct joint assessments with employee representatives. - Employee and Applicant Rights to Pay Data
Employees and applicants can request where their pay sits relative to others of a different gender — even at the job offer stage, where initial pay or its range must be disclosed. - Public Data and Penalties
Firms must publish pay gap data and face fines for non-compliance. Transparency is not just expected — it’s enforced.
How Transparent Do We Need to Be?
The directive shifts the burden of proof. Under Article 18, it’s no longer up to employees to prove discrimination — employers must show they’re not being discriminatory. This makes documentation, clear policies, and proactive communication more essential than ever.
How Workday Can Help: Tech as an Enabler
Neil highlighted how Workday is strategically positioned to support companies with EUPTD compliance across three fronts:
- Reporting: Automated generation and distribution of EUPTD metrics.
- Data Consolidation: Unifying disparate data sets through Workday Prism Analytics.
- Process Management: Streamlining workflows via Workday Extend.
These tools empower HR teams to stay compliant while focusing on driving equity and engagement.
Delivery Options and Kainos Solutions
For companies looking for tailored support, Kainos offers several delivery models to fast-track EUPTD readiness:
- Kainos Services for crucial data prep and readiness.
- Kainos Pay Transparency & Equity App for centralised data visualisation and analysis in real time. This includes:
- Pay Equity Engine to identify trends and provide pay gap explanations
- Regulatory reporting to produce annual compliance reports and explain pay gaps for regulatory, transparency and budget planning.
Where Should Employers Start?
- Consult with Kainos
We offer technical and strategic guidance on how to operationalise compliance through Workday. - Engage Legal Counsel
Understand how the directive will be implemented in your specific jurisdictions. - Review External Reward Data
Benchmark your compensation structure to industry standards and flag potential risks early.
Final Thoughts
Pay transparency is no longer a future consideration — it’s an immediate priority. With strong legislative backing, employee expectations, and technology ready to support, the time to act is now.
As Neil Fromow made clear, embracing the directive not only ensures compliance — it sets the foundation for a fairer, more equitable workplace across Europe.
