As EU member states prepare to implement the Pay Transparency Directive by June 2026, the early approaches of countries like Sweden and Belgium offer insight into the varied ways this directive may impact employers across Europe. Although the directive aims for consistency, each country's approach reflects unique cultural and regulatory landscapes, potentially setting the stage for wider implications.
Member States are required to transpose the Pay Transparency Directive into national law by 7 June 2026 with the first report on gender pay, for those employers with 150 or more employees, to be done in 2027, based on 2026 data.
Sweden has published its first proposal for full implementation and Belgium has introduced some of the Directive's requirements for public sector employers in the Fédération Wallonie-Bruxelles.
So what can we learn from the approaches proposed by these very different nations?
Here, we examine the steps taken by early adopters Sweden and Belgium and explore their implications for international employers managing compliance across multiple jurisdictions.
Sweden – enhanced obligations enabled by transparent culture
In Sweden, individual earnings are easily accessible. Whilst the existing law does not give individuals specific rights to access information regarding pay levels at their employer, final tax statements, which include information on the individual's income, are on the public record, so salaries are therefore also on the public record. This culture of openness feels alien to British citizens and is not commonplace across the EU.
In that context, the additional requirements of the Directive are not widely anticipated to put significant additional pressure on employers.
With long-established tradition of transparency around pay, Sweden proposes to transpose the Directive by amending its existing Diskrimineringslagen (Discrimination Act), which already requires employers with 10 or more employees to conduct annual reviews of equal jobs and jobs of equal value, leading to an equal pay action plan in collaboration with local trade unions. The additional reporting and other requirements of the Directive will be introduced, and Sweden proposes to go further than required by the Directive, for example by proposing that provisions in the Directive that only apply to larger companies should apply to all employers in Sweden.
Perhaps other member states who already consider themselves to be leaders in pay transparency will follow suit and require employers to do more in terms of reporting and openness than the Directive itself requires.
Belgium – public sector targeting of potential causes of pay gaps
Belgium's gender pay gap is one of the lowest in the EU at around 5%, with requirements since 2009 to include information about gender pay in annual reports and comparative analysis and action plans required by employers with over 50 employees.
Whilst the national plans for implementation by the federal government of Belgium are not yet known, some of the requirements of the Directive have been brought into effect for public sector employers in the Fédération Wallonie-Bruxelles (French Community of Belgium).
Again, the Fédération Wallonie-Bruxelles has gone further than the Directive in some respects, although the focus is different to that of Sweden. As well as gender pay gap analysis, "intersectional pay equity" audits will be required in this sector, recognising that discrimination can take place on more than one protected ground, and reflecting the principle in the Directive that an intersectional approach is important for understanding and addressing the gender pay gap. Pay reporting by the government in respect of this sector will also include information regarding leave given to male and female employees and comparing their pay related to maternity, childbirth, adoption, parental and other "family related responsibility" leave.
The focus in the Fédération Wallonie-Bruxelles appears to be aimed at highlighting, and in so doing eliminating, the causes of potential pay disparity, such as factors relating to childcare. This is, of course, the purpose of the legislation, and it will be interesting to see which member states adopt a purposive approach to gender pay reporting and which adopt something that, on the face of it, is more aimed at compliance.
Impact on international employers
Perhaps it is to be expected that early implementors will look to expand upon the requirements of the Directive. It is highly unlikely that this will be the case across the EU. Organisations or groups with employees situated throughout Europe will need to closely monitor how individual member states transpose the Directive. Variations in specific legal requirements and cultural differences may impact internal communications and the feasibility of achieving consistency across the group, if desired.
With thanks to Anneli Lönnborg, Advokatfirman Fylgia, Sweden.
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