4 September 2025
Is Ireland on track to transpose the EU’s Pay Transparency Directive by June 2026, and how can employers prepare for the changes which may expose their pay equity related practices?
The Pay Transparency Directive (the “Directive”) aims to reduce the gender pay gap and promote a culture of fairness and accountability by mandating employers to provide pay information to job applicants and employees. While equal pay and more recently gender pay gap reporting is well established in Irish HR practice, the Directive will change the way employers recruit, reward, and report on their pay data.
The Directive has not yet been transposed in Ireland; however, the government has taken some steps towards this. In January 2025, the General Scheme of the Equality (Miscellaneous Provisions) Bill 2024 (the “Bill”) was published which included two provisions relating to enhancing transparency prior to employment (Articles 4 and 5 of the Directive).
The Bill is likely to be amended, and we expect that the additional gender pay gap reporting requirements of the Directive will be reflected in amendments to the Gender Pay Gap Information Act 2021 (and related Regulations).
The Directive requires employers to report on the gender pay gap between ‘categories of worker’ distinguished by basic and variable pay and introduces joint pay assessments with worker representatives. The Directive also promotes transparency in job advertisements, information regarding pay levels and introduces a prohibition on pay secrecy.
The impact of the Directive will be organisation-wide, affecting everything from recruitment policies and processes to the management and accessibility of pay data. Employers must be prepared to share relevant information about pay with employees and report pay gaps.
Employees will have the right to receive information on their individual pay and the average pay by gender for categories of employees performing the same or work of equal value. Employers must inform all employees annually about this right and explain how they can access the relevant pay data.
In addition, employers must make information about the criteria used to determine pay, pay levels, and pay progression (where there are at least 50 employees) easily accessible to all employees. These criteria must be objective and gender-neutral to comply with the Directive.
Furthermore, provisions on pay confidentiality will be prohibited from being included in contracts of employment and company policies.
Job advertisements and job titles for vacancies must be gender-neutral. Employers will be prohibited from asking job applicants about details regarding their pay history with current or previous employers.
Job applicants will also have the right to receive information about the initial pay or pay range for the vacancy.
Reporting on a pay gap will be mandatory for employers with at least 100 employees, with the obligation being implemented progressively.
It is likely that the current Irish threshold of 50 or more employees for reporting purposes will remain.
If a pay gap report reveals an unjustified pay gap of 5 percent or more (which cannot be objectively justified or has not been rectified within a 6-month period), an employer must conduct a joint pay assessment which should be carried out by employers in cooperation with workers’ representatives. If there are no workers’ representatives, they should be designated by workers for the purpose of the joint pay assessment. The aim being that joint pay assessments should lead, within a reasonable period of time, to the elimination of gender-based pay discrimination through the adoption of remedial measures.
The Directive focuses on greater enforcement in equal pay and reporting matters and provides that compensation should cover in full the loss and damage sustained as a result of gender-based pay discrimination in accordance with the case-law of the Court of Justice. It should include full recovery of back pay and related bonuses or payments in kind, as well as compensation for lost opportunities, such as access to certain benefits depending on pay level, and for non-material damage, such as distress because of the undervaluation of work performed. Where appropriate, compensation can consider damage caused by pay discrimination based on gender that intersects with other protected grounds of discrimination. The Directive expressly prohibits Member States from fixing a prior upper limit for compensation.
In the event of a claim, the burden of proof is on an employer to demonstrate that no pay discrimination has occurred. This is noteworthy in the Irish context and could see more of an increase in pay related matters appearing in the Workplace Relations Commission and the courts.
As referenced above, so far, we have seen two provisions under the Bill directed at implementing Articles 4 and 5 of the Directive. Head 4 of the Bill requires employers to provide information about salary levels or ranges in the job advertisement. This proposed amendment arguably goes beyond what is provided for in the Directive which requires employers provide the necessary information in the advertisement or in advance of an interview.
Head 5 of the Bill prohibits employers from asking a job applicant about their pay history, meaning that employers will no longer be able to enquire about an applicant's current salary which might have been used as a base for their new salary.
While we await much of the detail as to how the Directive will be fully transposed into Irish law, we are assisting employers to get ready for the changes under the Directive, and we recommend that employers consider:
KPMG Law assists employers in examining their current pay structures, how they might categorise workers, recruitment and pay transparency practices and gender pay gap reporting. Our Employment Law Team, led by Aoife Newton, can advise on all aspects of the Directive and the best approach employers should take in anticipation of these changes to its operation in Ireland. Please contact a member of the team for more information.
