What the EU Pay Transparency Directive means for small employers

The size myth

Directive (EU) 2023/970 is often described as a reporting law for large employers. That is only true of one part of it. The gender pay gap reporting duty is tied to headcount, but the transparency duties — pay ranges in job ads, no salary-history questions, and the right of workers to ask for pay information — apply regardless of company size.

If you have five employees and you advertise a vacancy, the range belongs in the advert.

The four duties that hit a small employer first

1. Pay ranges in job adverts. Candidates must know the initial pay level or range before the interview, either in the advert or before the conversation. In practice, publishing it in the advert is the only reliable way to do this consistently.

2. No salary-history questions. You may not ask what a candidate currently earns or what they earned in a previous job. This includes application-form fields and casual questions in a first call.

3. Pay criteria must be objective and gender-neutral. Pay levels and pay progression must rest on criteria such as skills, effort, responsibility and working conditions. Workers must be able to access those criteria easily.

4. The right to pay information. A worker can ask in writing for their own pay level and for the average pay levels, split by sex, for the same work or work of equal value. You have two months to answer, and you must tell workers annually that this right exists.

Reporting by size band

250 or more workers: report annually. 150–249: every three years. 100–149: every three years, starting in 2031. Under 100 workers: no reporting duty at all — but every duty above still applies.

What you actually need to build

A defensible pay structure. That means grouping your roles into categories of work of equal value using the four criteria, setting a minimum, midpoint and maximum for each category, writing the criteria down, and being able to show how any individual's pay sits inside the structure.

It is less work than it sounds. Most small employers have between three and eight distinct roles, and they fall into three or four grades.

Deadline and national law

The transposition deadline was 7 June 2026. National implementation varies widely, and some member states add requirements on top of the directive. Build the baseline structure now, then check your country's official source before you publish your next advert.