Malta Implements The EU Pay Transparency Directive

The implementation of the Equal Pay (Transparency and Reporting) Regulations, 2026 (Legal Notice 173 of 2026) marks a major development in Malta’s employment law framework. Published on 5 June 2026 and entering into force on 7 June 2026, the Regulations transpose Directive (EU) 2023/970, commonly referred to as the EU Pay Transparency Directive, into Maltese law.

The new framework is designed to strengthen the principle of equal pay for equal work or work of equal value between men and women through enhanced transparency, reporting obligations, and enforcement mechanisms. While Malta has long recognised the right to equal pay under the Employment and Industrial Relations Act, the Regulations introduce a significantly more structured and proactive compliance regime for employers.

For employers operating in Malta, this is not simply a regulatory update. It represents a fundamental shift towards greater accountability, increased workplace transparency, and data‑driven pay governance.

From Equal Pay Principles to Practical Compliance

The principle of equal pay is not new. However, the Regulations transform what was previously a general legal obligation into a comprehensive operational framework requiring employers to demonstrate how remuneration decisions are made and justified.

Central to the Regulations is the requirement that pay structures be based on objective, gender‑neutral criteria. Employers must be able to explain how salaries are determined, justify differences in pay, and ensure that remuneration practices are free from direct or indirect gender bias.

The Regulations also introduce the concept of work of equal value, requiring employers to assess jobs using objective criteria such as:

• Skills and qualifications
• Effort required to perform the role
• Level of responsibility
• Working conditions
• Other relevant, non‑discriminatory factors

This means that employees performing different roles may nevertheless be entitled to equal pay where those roles are assessed as having equivalent value within the organisation.

Increased Transparency

One of the most immediate changes affects the recruitment process.

Job applicants now have the right to receive information about the initial pay level or salary range applicable to a position before employment commences. Employers must provide sufficient information to allow candidates to make informed decisions and negotiate effectively.

Equally significant is the prohibition on employers asking applicants about their salary history. This measure seeks to prevent the perpetuation of historical pay inequalities, particularly those arising from gender‑based disparities in previous employment.

As a result, organisations may need to review recruitment procedures, job advertisements, interview practices, and onboarding documentation to ensure compliance with the new transparency requirements.

New Rights for Employees Under the EU Pay Transparency Directive

The Regulations introduce enhanced information rights for employees, providing greater visibility into workplace pay structures.

Workers are entitled to request information regarding:

• Their own pay level
• Average pay levels, broken down by gender, for workers carrying out the same work or work of equal value

Employers must provide this information in writing and ensure that employees are informed of their rights to make such requests.

The Regulations further prohibit contractual provisions that prevent employees from disclosing or discussing their remuneration. The objective is to create an environment where unjustified pay disparities can be identified and challenged more effectively. For many employers, this will necessitate greater consistency in compensation practices and more robust documentation supporting salary decisions.

Gender Pay Gap Reporting Obligations

Perhaps the most significant compliance burden introduced by the Regulations relates to gender pay gap reporting. Employers with 100 or more employees are now required to prepare and publish reports containing information on:

• Overall gender pay gap
• Median gender pay gap
• Differences in variable and supplementary remuneration, including bonuses
• Distribution of male and female employees across pay quartiles
• Other prescribed pay‑related metrics

Reporting obligations will apply progressively according to employer size:

• Employers with 150 or more employees will be subject to the earliest reporting requirements
• Employers with 100 to 149 employees will become subject to reporting at a later stage, in line with the phased implementation provided under the Regulations

These requirements are intended to provide both employees and regulators with greater visibility into organisational pay practices and to encourage employers to identify and address disparities proactively.

Joint Pay Assessments and Corrective Action

The Regulations do not merely require reporting. Where gender pay gap reporting reveals significant unexplained disparities, employers may be required to undertake a joint pay assessment in collaboration with employee representatives.

The purpose of these assessments is to:

• Identify the causes of any pay differentials
• Determine whether those differences can be objectively justified
• Develop corrective measures where required
• Monitor implementation of remedial actions

This represents a notable shift from reactive enforcement towards preventative compliance and ongoing monitoring.

What Should Employers Know?

Although reporting obligations will be phased in over time, the majority of the transparency provisions are already in force. Employers should therefore begin reviewing their pay practices without delay.

Key preparatory measures may include:

• Evaluating current remuneration structures
• Reviewing job classification methodologies
• Conducting internal pay gap analyses
• Establishing objective and gender‑neutral pay criteria
• Updating recruitment processes and documentation
• Preparing internal policies on pay progression and transparency
• Ensuring appropriate record‑keeping and governance arrangements

Organisations that adopt a proactive approach will be better positioned to manage compliance risks, strengthen employee trust, and demonstrate their commitment to fair and transparent employment practices.