Prepare for EU Pay Transparency with Explainable Job Value

Directive (EU) 2023/970 strengthens the application of the principle of equal pay for women and men performing equal work or work of equal value.

It introduces requirements relating to recruitment transparency, workers' rights to pay information, objective pay structures, gender pay gap reporting, joint pay assessments and enforcement.

The Directive applies to employers in the public and private sectors within EU Member States.

Some requirements, including aspects of recruitment transparency and workers' information rights, apply broadly across employers.

Regular gender pay gap reporting applies to employers with at least 100 workers, according to the phased timetable. National laws may extend certain requirements or introduce additional procedures.

A company headquartered outside the EU may still be affected where it employs workers through an EU subsidiary, branch or other local establishment.

The applicable obligations should be assessed under the national laws of the Member States in which the workers are employed.

Companies outside the direct legal scope may also adopt pay-transparency practices to meet employee expectations, customer requirements, investor expectations or internal pay-equity objectives.

Employers with 250 or more workers must submit their first report by 7 June 2027 and report annually thereafter.

Employers with 150–249 workers must submit their first report by 7 June 2027 and report every three years thereafter.

Employers with 100–149 workers must submit their first report by 7 June 2031 and report every three years thereafter.

Each report concerns information relating to the preceding calendar year.

A joint pay assessment may be required where the average gender pay gap within a category of workers is at least 5%, the difference cannot be justified through objective and gender-neutral criteria, and the employer has not remedied the difference within six months of reporting.

All three conditions must be present.

Job-E identifies categories reaching the threshold and provides analytics to support investigation, documentation and action planning.

The Directive does not prescribe one particular job evaluation methodology.

It requires pay structures to enable the assessment of equal work and work of equal value using objective, gender-neutral criteria, including skills, effort, responsibility and working conditions.

A structured job evaluation and classification approach can provide the consistency and evidence needed to support this assessment.

Job-E combines its core job evaluation methodology with separate effort and working-conditions assessments. The results are brought together in the Pay Transparency report, with guidance to support the review and documentation of comparable categories of workers.

The core Job-E grade is designed to measure the organizational value and complexity of a position consistently across the organization.

Effort and working conditions may require a separate assessment because they can be particularly relevant to equal-value comparisons without necessarily determining the position’s organizational grade.

Job-E keeps these assessments visible rather than embedding them invisibly within the grade.

The Pay Transparency report brings all relevant criteria together and provides guidance on how effort and working conditions should be considered when reviewing equal work or work of equal value.

Not automatically.

The Job-E grade provides an important and consistent starting point, but the broader equal-value assessment also considers:

• Factor-level evaluation results
• Effort
• Working conditions
• The nature of the work
• Relevant organizational context
• Other objective, gender-neutral criteria that may apply

Job-E brings this information together to support a documented review rather than automatically treating every position with the same grade as identical.

No software platform can independently guarantee compliance across every EU Member State.

Job-E supports job evaluation, equal-value assessment, pay analysis, documentation and reporting preparation associated with pay transparency.

It does not replace legal advice, consultation with workers’ representatives, country-specific review or submission to national authorities.

Employers remain responsible for confirming and fulfilling the national requirements applicable in every country where they operate.

Pay and employee-level information is processed on EU-hosted infrastructure and protected through encryption, access controls and organizational data isolation.

Names and email addresses are not required for pay analysis. Employee records can be connected using pseudonymous identifiers.

Pay and employee-level compensation data are not transmitted to external AI services.