Key Points
Pay transparency will become a legal requirement with the implementation of European Directive 2023/970 by June 7, 2026, at the latest. Companies will be required to make compensation, pay ranges, and compensation criteria more transparent and justifiable. Employees will have the right to access information about their pay and the average pay levels for their job category, broken down by gender. Pay transparency marks the shift from a focus on compliance to a focus on managing pay equity and compensation policy.
Long considered asensitive subject, remuneration is becoming afully accepted strategic management issue. With European Directive2023/970,salary transparencywill no longer be an HR governance option, but alegal obligationbyJune 7, 2026.
Behind this reform lies a clear objective:to guarantee equal pay for equal work or work of equal value, by giving employees and job applicants agenuine right of access to information.
"Transparency in remuneration should not be seen as a legal constraint, but as an indicator of the maturity of HR policy," explains Joëlle Kahn, Partner at MCR Rewards.
What exactly are we talking about when we refer to salary transparency?
Transparency in compensationdoes not mean publicly displaying each employee's salary. It consists of making the following informationclear, accessible, and justifiable:
- compensation levels,
- ranges by position or job category,
- theobjective criteriaused to set, increase, or adjust salaries.
It covers the entire package:fixed, variable, bonuses, benefits, and long-term incentives.
The issue is not curiosity, but theability to demonstrate fairness.
What the European directive actually requires
Starting in 2026, four structural changes will transform HR practices.
1. Transparency from the moment of recruitment
Companies will have toindicate the salary or a salary rangeduring the recruitment phase.
It will beprohibited to ask for acandidate'ssalary history.
Objective:to break the mechanical reproduction of past inequalities.
Discover the white paper on transparency and compensation for sales representatives
Understand theimplications of European Directive 2026, its impact on yourfixed and variable compensation schemes, and the new requirementsregarding fairness and justification of practices.
2. Employees' right to information
Each employee may request:
- theirindividual compensation level,
- theaverage remuneration levels forits category,broken down by gender.
The company will have to respond within a specified time frame. This requiresreliable, structured, and manageable data.
3. The end of taboos and confidentiality clauses
Clauses prohibiting employees from discussing their salaries will bebanned.
Comparison becomes a right, explanation becomes a managerial obligation.
4. Enhanced and enforceable reporting
Companies in:
- more than 250 employeeswill have to publish anannual report,
- 100 to 250 employees, every3 years.
If adeviation of more than 5%occurs without objective justification, ajoint assessmentmust be carried out with the social partners.
And above all:the burden of proof shifts. It will no longer be up to the employee to prove discrimination, but up to the company to prove fairness.
"We are moving from a declarative approach to a real, enforceable approach to pay equity," emphasizesThierry Magin, Associate Director at MCR Rewards.
Why the Egapro Index will no longer suffice
Many companies believe they are covered by theirProfessional Equality Index. This is astrategic error.
The Index is:
- macro, statistical, and aggregate,
- The directive requires adetailed readingby category of trades of equivalent value.
- and above all, it creates anenforceable individual right.
Having a score of 90/100 on the Index will not prevent litigation if an unjustified individual discrepancy is demonstrated.
A regulatory constraint... or a strategic opportunity?
If poorly anticipated, transparency can createsocial tensions. If well prepared, it becomes acompetitive advantage:
- Employer attractiveness: over 50% of candidates refuse to apply without salary information.
- Managerial credibility: clear rules prevent arbitrariness.
- Collective performance: fairness improves engagement and retention.
How to prepare now
Three key projects:
- Audit and ensure data reliability
Without clean data, transparency is impossible. - Structure the grids and rules of the game
If two people have different salaries, you must be able to explainwhy. - Training managers to talk about compensation
Tomorrow, they will have toexplain, justify, and reassure.
Learn more about training managers in compensation
In conclusion
Salary transparencyis not a regulatory fad. It is aprofound change in governance culture.
Companies that anticipate this now will turn an obligation intoa lever for credibility, attractiveness, and performance.
Those that wait until 2026 will discover the issue... through conflict or control.
MCR Rewards supports companies in transforming pay transparency into a real lever for strategic management, sustainable fairness, and collective performance.
Pay transparency: a legal obligation, a strategic lever
Anticipate the requirements of EU Directive 2023/970 and turn pay transparency into a driver of motivation, fairness and employer attractiveness.
Get a head start: audit, training, personalized support... let's work together to build an approach aligned with your challenges.
FAQ
What changes will the European directive on pay transparency bring in 2026?
European Directive 2023/970 requires greater transparency regarding compensation throughout an employee’s career. In particular, companies will be required to disclose salary information at the time of hiring and be able to justify their compensation practices.
How can you prepare your company for pay transparency?
The preparation process is based on three priorities: ensuring the reliability of compensation data, structuring pay scales, and training managers to explain compensation decisions. Proactive planning helps reduce social, legal, and organizational risks.
Why can pay transparency become a competitive advantage?
When implemented effectively, transparency enhancesan employer’s appeal, builds trust in compensation policies, and strengthens employee engagement. MCR Rewards helps companies comply with the European directive and develop compensation policies that are fairer and more transparent.
Will companies be required to disclose the salaries of all their employees?
No. Pay transparency does not mean publishing individual salaries. It aims to make salary levels, pay ranges, and the objective criteria used to set or adjust salaries publicly available.
Will the Egapro Index be sufficient to meet the new requirements?
No. The Professional Equality Index remains a general indicator, whereas the directive requires a more detailed analysis ofpay equity and establishes enforceable individual rights. A high score on the Index does not guarantee compliance with the new requirements.
