Directive (EU) 2023/970 of the European Parliament and of the Council - Introducing pay transparency rules as a tool to eliminate the pay gap between women and men

The long-standing gender pay gap, which stands at around 13% in the EU, has led to the adoption of a new legislative framework aimed at strengthening the right to equal pay for equal work or work of equal value. In May 2023, the EU adopted a new Directive (EU) 2023/970 of the European Parliament and of the Council on strengthening the application of the principle of equal pay for men and women for equal work or work of equal value through pay transparency and enforcement mechanisms (the “Pay Transparency Directive”), which introduces a set of binding rules on pay transparency and enforcement mechanisms.

Although the transposition period does not end until 7 June 2026, the new rules will represent a significant change for all employers in the Member States - they introduce obligations related to a transparent remuneration structure, objective work evaluation without gender bias, and the obligation to eliminate systemic inequalities.

By adopting the Pay Transparency Directive, the EU is following up to the long-standing principles of equality between men and women enshrined not only in Articles 2 and 3(3) of the Treaty on European Union and in Articles 8 and 10 of the Treaty on the Functioning of the European Union, but also in the United Nations Convention of 18 December 1979 on the Elimination of All Forms of Discrimination against Women, which in Article 11 provides that the Parties shall take all appropriate measures to ensure, inter alia, the right to equal remuneration, including benefits, and to equal treatment for work of equal value, as well as equality in the assessment of the quality of work.

Scope of the Pay Transparency Directive

The Pay Transparency Directive applies to all employers in both the private and public sectors. Its provisions also apply to all workers who work under a contract of employment, or an employment relationship under applicable law, collective agreements or established practice in the Member States. The interpretation of the term "worker" is based on the case law of the Court of Justice of the EU, thus ensuring a uniform and broad application of the Pay Transparency Directive throughout the Union.

In addition to employees, however, some of the obligations of the Pay Transparency Directive (in particular regarding transparency during the recruitment process) also apply to job applicants. The aim is to ensure equal access to pay from the selection stage and to prevent discrimination before the employment relationship is concluded.

New obligations for employers

• Reporting on the gender pay gap

 

Employers with 100 or more employees will be required to submit reports on the gender pay gap at regular intervals to the competent authority, which will be designated under the national legislation to be prepared. Employers will be required to submit reports with information on:

• gender pay gap;
• the gender pay gap in terms of additional or variable remuneration components;
• median gender pay gap;
• the median gender pay gap in terms of additional or variable remuneration components;
• the proportion of women and men receiving additional or variable remuneration components;
• the proportion of women and men in each quartile of remuneration;
• gender gap in the remuneration of male and female employees according to their categories, with a breakdown by regular basic wage or salary and additional or variable components.

The deadline for compliance with the obligation, as well as the frequency of its implementation, varies depending on the number of employees of individual employers. Employers with 250 or more employees will have to submit the required information annually, for the first time no later than 7 June 2027. Those employing 150 to 249 workers will do so once every three years, with the same starting date. Smaller employers with 100 to 149 employees have this obligation only from 7 June 2031, again with a three-year periodicity.

The Pay Transparency Directive provides that employers with fewer than 100 employees may submit reports on a voluntary basis, but it is up to the legislator to make the submission of information mandatory under national law for these entities as well.

The accuracy of the information provided must be confirmed by the employer's management after consultation with employee representatives, who also have access to the methodologies applied by the employer.

Information on the gender pay gap among employees by their categories, broken down by regular basic salary or wage and by supplementary or variable components, will be required to be provided by employers directly to employees and employee representatives. They will also provide this information to the labour inspectorate and the equality body upon request. All these entitled parties, including employees, have the right to request additional clarifications and details, in particular in the event of differences in pay between men and women. If the employer is unable to explain these differences objectively and in a gender-neutral manner, they are obliged to take corrective measures within a reasonable period of time, in close cooperation with workers' representatives, the labour inspectorate and/or the equality body.

• Joint pay assessment as a tool to close the gender gap

If the remuneration reports reveal a gender gap of at least 5% within any category of employees, which the employer cannot objectively justify on the basis of objective, gender-neutral criteria and at the same time fails to remedy the situation within six months of the submission of the remuneration report, a so-called joint remuneration review is called for. This process must be carried out in cooperation between the employer and employee representatives and its aim is to analyse in detail the causes of the inequality and to take specific corrective measures. The results of the joint review must be made available to employees and their representatives, as well as to the monitoring body, and the employer must also submit them to the labour inspectorate and the equality body upon request. Any unjustified pay gaps identified must be eliminated within a reasonable period of time, in close cooperation with employee representatives. Where necessary, the labour inspectorate or the equality body may also be involved in the process. The main objective of this procedure is, in particular, to eliminate any direct or indirect discrimination in remuneration based on gender.

Remedies and enforcement of the principle of equal pay

1. Right to access judicial protection

The Pay Transparency Directive also requires Member States to ensure that all employees who believe that they have been wronged because the principle of equal pay has not been applied have access to legal proceedings to enforce their rights and obligations relating to the principle of equal pay. Mechanisms ensuring protection against discrimination in the area of pay are already part of the Slovak legal order. They are based on Act No. 365/2004 Coll. on equal treatment in certain areas and on protection against discrimination and on amending and supplementing certain acts (Anti-Discrimination Act), which, in conjunction with Act No. 160/2015 Coll., provides the persons concerned with a procedural opportunity to seek protection of their rights through anti-discrimination actions.

2. Possibility of acting on behalf of or in support of employees

Member States are also obliged to ensure that entities that meet the conditions laid down in national law – in particular associations, organisations, equality bodies, employee representatives or other legal persons with a legitimate interest in promoting equality between women and men – have the legal possibility to initiate administrative or judicial proceedings in cases of alleged infringements of rights or obligations relating to the principle of equal pay. These entities may act on behalf of or in support of the employee who is the alleged victim of such an infringement, with his consent. This again, is not entirely new to Slovak national legislation, as it already allows a party in an anti-discrimination dispute to be represented by an authorised person under the rules on equal treatment and protection against discrimination.

3. Right to full compensation for damages

Any employee who has suffered damage as a result of a breach of any rights or obligations relating to the principle of equal pay has the right to full and effective compensation. The compensation must cover:

• unpaid wages and related components (bonuses, benefits in kind);
• compensation for lost opportunities;
• non-pecuniary damage;
• interest on late payment;
• other factors, such as intersectional discrimination.

At the same time, such compensation must not be limited in advance by any upper limit.

4. Other remedies

In the event of a violation being detected, the competent court or authority may issue:

• an order to stop the infringement;
• an order to take measures to ensure the application of rights or obligations related to the principle of equal pay.

If the defendant (i. e. the employer) fails to comply with these orders, Member States must ensure that competent authorities or national courts can issue repeated orders for payment of the penalty in order to ensure compliance with the obligations.

5. Burden of proof

In court proceedings, the burden of proof shifts to the defendant (i.e., the employer) if the employee presents facts suggesting that direct or indirect discrimination has occurred. An important aspect is that if the employer breaches pay transparency obligations, they must also demonstrate that no discrimination took place.Member States may also introduce more favourable rules of evidence in favour of the worker, with exceptions to this regime only possible in cases where the court or competent authority itself investigates the facts.

6. Comparison of work and means of proof

The assessment of whether women and men perform the same work or work of equal value does not have to be limited to employees of the same employer. The so-called “single source” that determines the conditions of remuneration is important. This exists if it sets out the elements of remuneration that are relevant for the comparison of workers. At the same time, this assessment also applies to employees who are not employed at the same time as the employee concerned. Even without the existence of a comparator, any other evidence can be used, including statistics or a comparison of how the worker would be treated in a comparable situation.

7. Access to evidence and protection of confidential information

In legal proceedings, courts can order employers to disclose evidence under their control, including confidential information. The legal framework must also guarantee effective protection of this data.

8. Sanctions

Member States are required to lay down rules on the application of penalties which are effective, proportionate and dissuasive for infringements of the rights and obligations arising from the principle of equal pay. Specific penalties will apply in the event of repeated infringements.

New Act on Remuneration Transparency

The work related to the transposition of the Pay Transparency Directive into the national law of the Slovak Republic has already begun. On 15 May 2025, the Ministry of Labour, Social Affairs and Family of the Slovak Republic published the so-called Preliminary Information as part of the legislative process, in which it informed that it is currently preparing a draft of a new act on transparency of remuneration.