New wage transparency regulations – are companies ready to disclose salaries?

The EU Directive 2023/970, adopted on May 10, 2024, introduces new obligations for employers regarding wage transparency. Its goal is to ensure equal pay for men and women performing the same or equivalent work and to reduce the gender pay gap.

The Directive requires companies to disclose information on pay and pay structures, provide transparency in pay structures, and take action to eliminate inequalities. 

The Polish Parliament (Sejm) has just started working on a bill that is to implement the regulations into national law.

Employers should familiarize themselves with the upcoming changes and prepare for their implementation.

The gender pay gap

In many European countries, the average earnings of women in the same positions are 12.7% lower than those of men. Globally, this gap is as much as 23%. In Poland, this gap is 7.8%.   

The EU directive aims to eliminate pay disparities,ensuring that salaries for the same job or work of equal value are not determined by gender.

The new rules established by the European Union will come into force on June 7, 2026, and Poland should implement the Directive into its legal system by that date.

Salary transparency – What will change?

Until now, the amount of salaries has remained a secret in most companies. The new law introduces wage transparency, making salaries public during employment and even before hiring.

Under the proposed legislation, employees will have the right to request information about their individual salary levels. They will also be entitled to access average salary levels within the company, broken down by gender for comparable positions.

However, the draft law fails to define what constitutes “work of equal value”, which may create difficulties for employers in compliance.

Furthermore, according to the draft, the right to submit applications is also granted to persons employed under forms of employment other than those provided for in Article 2 of the Labor Code (e.g. contract of employment, appointment, election, nomination or cooperative employment contract). However, this provision is closed, which raises doubts as to the group of people to whom it refers.

Employers will be required to respond to employee salary inquiries within 14 days, a significantly shorter timeframe than what is outlined in the EU directive.

New employer obligations in the recruitment process

Employers will be required to specify the proposed salary in the job advertisement, indicating both minimum and maximum pay levels.

They may also include a note stating that the salary is subject to negotiation.

Job candidates must be assured that salary decisions are based on transparent criteria and that gender does not influence pay levels for the same position.

Employee rights under the New Law

Employees will also have the right to access the criteria that the employer uses to determine the amount of remuneration. The bill does not indicate what these criteria should be or how the employer is to provide access to them. However, it seems that the employer will have discretion in determining them, but will have to remember that they are not discriminatory.

The draft law also provides for the possibility of exemption from this obligation for employers with fewer than 50 employees. However, it is not specified who will grant such exemption.

Moreover, employees will have the right to disclose information about their salary. If they believe that the employer has discriminated against them and treated them unequally, they will be able to file a lawsuit.

In legal proceedings, the burden of proof will be on the employer to demonstrate that pay policies are fair and non-discriminatory.

Penalties for non-compliance

The draft law proposes lower fines for employers than those recommended by the EU directive.

Employers may face fines ranging from PLN 1,000 to 30,000 for failing to provide employees with salary information. The same penalty may be imposed on an employer who:

• fails to include information about the salary range in a job advertisement,
• hires an employee for a lower salary than stated in the job offer.

Who will be affected by the new regulations?

The directive stipulates that the changes will primarily affect large employers with more than 250 employees, who will be the first to have to submit a report for 2026.  These companies must ensure that their gender pay gap does not exceed 5%.

Smaller businesses with 100–250 employees will need to report their pay gaps every three years.

When will the changes come into force?

Poland must implement the EU Directive by June 7, 2026. The draft law assumes that the amendments to the Labor Code will come into force six months after their announcement in the Journal of Laws. The entire legislative process should therefore be completed by the end of 2025.

Key gaps in the Draft Law

The proposed bill does not yet contain a detailed definition of the remuneration, the pay gap, or the remuneration structures, or even of work of equal value. These issues should be supplemented and clarified before the law comes into force.

The directive also requires member states to regulate employer reporting on pay gaps – annual reports for companies with more than 250 employees and once every three years for companies with 100 to 250 employees.

The draft law is still very general and does not include regulations on monitoring compliance with the new regulations or the role of labor inspectorates in supervising employers Furthermore, data protection concerns related to salary disclosures must be addressed.

Employers must act now – how to prepare for the changes?

Implementation of the EU Directive will have a positive impact on the labor market, eliminating the pay gap and ensuring pay transparency. Pay transparency will ensure that employees are treated fairly and equally.

Although the Polish legislation still requires refinements, employers should start aligning their pay policies with EU standards now.

It is worth ensuring regular training for HR staff and analyzing the salary structure to avoid inequalities. Implementing the changes requires planning and a gradual revision of the payroll system. Starting this process earlier will allow companies to better manage their budget and minimize the impact of new regulations.

If you would like to know more about upcoming changes in labor law or need support in the hiring process, contact our specialists from the Labor Law department: [email protected]