Key Points
Pay transparency is becoming a major requirement for companies with more than 100 employees with the entry into force of the European directive in 2026. Mid-sized companies will need to be able to justify pay disparities based on objective and documented criteria. Structuring pay scales, conductingpay equity analyses, and training managers are becoming priorities to prepare for the new requirements. When properly implemented, pay transparency can strengthen internal trust, enhance employer attractiveness, and improve the company’s social performance.
Remuneration transparency is still not firmly rooted in corporate culture in France. Few employees talk freely about their salaries, although this reticence is tending to diminish among the younger generations. This lack of transparency contributes to unjustified pay disparities, particularly in mid-sized companies, where pay scales and internal rules are often poorly formalized.
However, a paradigm shift is on the horizon with the entry into force of the European directive on pay transparency.
Learn more about Transparency in compensation
What the European directive provides for as of 2026
From 2026, companies with more than 100 employees will have to publish regular reports on their pay practices:
- Companies with more than 250 employees: annual publication
- Companies with 100 to 250 employees: publication every three years
The main aim is to reduce pay inequalities, particularly between men and women, and give all employees the right to access information on internal remuneration for equivalent positions.
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What does this mean for small businesses?
This new regulatory framework will profoundly transform compensation management within ETIs. All employees will be able to compare their remuneration with that of their peers. If the company is not prepared, this could lead to internal tensions, a feeling of unfairness and reputational risks.
Read the article: Jobs of equal value: the moment of truth
Anticipating transparency: actions to take now
To make this obligation a lever for social performance rather than a source of tension, it is essential to act upstream. Here are some recommended best practices:
1. Conduct a compensation audit
An audit of pay practices enables us to identify unjustified pay discrepancies and take action before they become public knowledge. This step is essential to build a reliable diagnosis and a corrective strategy.
2. Structure a transparent pay grid
Drawing up a formal pay scale based on objective criteria (level of responsibility, skills, autonomy, working conditions, etc.) helps to explain pay differences andestablish a fair, understandablepay policy.
3. Train managers in salary communication
Managers are on the front line when it comes to answering questions about compensation. Specific training in salary transparency will enable them to better manage these exchanges, avoid awkwardness and ease potential tensions.
Read the article: Training managers in pay transparency: a decisive lever for the company
Turning a constraint into a competitive advantage
Pay transparency should not be seen as a regulatory constraint, but as an opportunity to structure HR policy over the long term. It reinforces :
- employee confidence,
- employer brand,
- attracting and retaining talent.
By anticipating the obligations of 2026, ETIs can sustainably differentiate themselves in their market and assert their position as a responsible employer.
Read the article: Salary transparency: a strategic issue that will become even more important between 2025 and 2027
Would you like to structure your compensation policy?
MCR Rewards assists small and medium-sized companies in complying with the European directive, carrying outsalary audits, constructing pay grids and training managers. Contact our experts to build a clear, fair and effective pay strategy.
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.
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FAQ
Why is pay transparency a major issue for mid-sized companies in 2026?
Mid-sized companies will be required to comply with new obligations regarding the disclosure and justification of compensation. This change requires better structuring of compensation policies and the ability to explain pay disparities among employees.
Are mid-sized companies affected by the European directive on pay transparency?
Yes. Companies with more than 100 employees are subject to the new obligations set forth in the European directive, with reporting requirements tailored to their size.
How Can a Mid-Sized Company Prepare for Pay Transparency?
The first step is to conduct a review of compensation practices to identify unjustified disparities. Next, it is necessary to structure the pay scales, formalize compensation criteria, and prepare managers to communicate on these topics.
How can salary transparency be turned into a competitive advantage?
A transparent and fair compensation policy boosts employee trust, strengthens the employer brand, and makes it easier to attract talent. MCR Rewards helps mid-sized companies structure their compensation policies to turn transparency requirements into a sustainable driver of performance and attractiveness.
