Pay progression criteria: how to write them for a small company
Article 6 of the EU Pay Transparency Directive asks for objective, gender-neutral pay and progression criteria. A practical way to write them, with examples.
Article 6 of Directive (EU) 2023/970 asks employers to make easily accessible to workers the criteria used to determine their pay, pay levels and pay progression. Those criteria must be objective and gender-neutral.
Pay levels versus pay progression
Pay level criteria explain why a role sits in a certain grade and band. Pay progression criteria explain how someone moves up: within a band, and from one grade to the next. The directive allows member states to exempt employers with fewer than 50 workers from the pay progression part. Whether your country uses that option depends on national law, so do not assume it until you have checked the official source.
What good criteria look like
- Observable: a manager and a worker can both tell whether it is met.
- Linked to the job: skills, effort, responsibility and working conditions, the four criteria the directive names for job evaluation.
- Gender-neutral in effect: avoid criteria that quietly reward uninterrupted full-time presence, such as "always available" or pure length of service without a link to skills.
- Written down and shared: a worker should find them without asking.
An example for a 20-person company
Movement within a band: yearly review. A worker moves from the minimum towards the midpoint when they perform all core tasks of the role independently, and above the midpoint when they also train colleagues or take on a defined extra responsibility.
Movement to the next grade: when the role itself changes and scores higher on skills, effort, responsibility or working conditions, not because of a negotiation.
Common pitfalls
Negotiation skill is not a criterion. Neither is previous salary: asking applicants about pay history is not allowed under Article 5. And a criterion used for one person has to be available to everyone in the same category.
Where to start
Criteria only make sense on top of a structure. Build grades and bands first, for example with the pay structure wizard, which also produces a pay criteria policy in the paid report. Our guide to salary bands for small companies shows the steps.
Sources
Article 6 of Directive (EU) 2023/970 on EUR-Lex. See also our methodology.
Frequently asked questions
- Do small employers need pay progression criteria?
- Pay level criteria apply to every employer. Member states may exempt employers with fewer than 50 workers from the progression part; check your national law.
- Can length of service be a criterion?
- It can play a role, but on its own it may disadvantage workers with career breaks. Link it to skills or experience in the role and apply it equally.
- How detailed do the criteria need to be?
- The directive asks for objective, gender-neutral and easily accessible criteria. For a small firm, one clear page tied to your grades is a practical start.
This article provides structure and general information, not legal advice.
Guides
- Job evaluation and work of equal value: a small-employer guide
How to compare different roles using skills, effort, responsibility and working conditions, the four criteria in the EU Pay Transparency Directive.
- Salary bands for small companies: a practical guide
A practical 6-step method for building salary bands in a small company: roles, objective criteria, grades, width and outliers.
- Gender pay gap reporting: deadlines by company size
Which employers report under the EU Pay Transparency Directive, from when, how often and what the report contains. Article 9 explained for small firms.