Pay Transparency: How to Prepare for It

The European Directive of 10 May 2023 on pay transparency must be transposed by the French legislature into domestic law by 7 June 2026. This directive lays down minimum requirements with a view to strengthening the application of the principle of equal pay between women and men for the same work or for work of equal value. These requirements, which will trigger major changes in the way remuneration policies are designed and implemented, are drafted with sufficient precision to enable companies to anticipate their application.

What is pay transparency?
In order to reduce the pay gap between women and men for the same work, the directive requires companies to be more transparent about their remuneration policies and about the information communicated to employees and/or potential candidates regarding pay. The gender pay gap is defined as the difference between the average levels of remuneration of female employees and male employees of an employer, expressed as a percentage of the average level of remuneration of male employees.

Transparency in recruitment
Job applicants will have the right to receive from the prospective employer information on the initial pay or its range, based on objective, non‑discriminatory criteria corresponding to the position concerned. This will help to ensure informed and transparent negotiations on pay. The employer will not be allowed to ask job applicants for their pay history in the course of their current or previous employment relationships.

Transparency in pay setting and progression
The employer will have to make available to its employees the objective and non‑discriminatory criteria used to determine pay, pay levels and pay progression. The French legislature may decide to exempt companies with fewer than 50 employees from the obligation to make available these criteria as regards pay progression.

Right of employees to precise information on their pay level
Employees will have a right to information on their pay level. They may request information on their individual pay level and on average pay levels, broken down by sex, for categories of employees performing the same work. This information must be provided by the employer in writing within two months. The employer must also inform employees in writing, once a year, of the existence of this right to information. It will also be prohibited to include any clause in employment contracts preventing workers from disclosing information relating to their remuneration. This information must be shared by the employer in compliance with the GDPR. The law may provide that, where there is a risk of disclosing an individual employee’s pay, the information will be communicated not to the employee but to a third party (staff representative, labour inspector, Defender of Rights).

Changes to the professional equality index
The professional equality index will evolve, in particular through the inclusion of new indicators. These will notably include the median pay gap between women and men and the gap in access to variable or supplementary remuneration. The principle of publishing the results and informing/consulting employee representatives will be maintained. The new indicators should be capable of being reported via the DSN (nominative social declaration).

Sanctions
In addition to strengthened sanctions that may be imposed by the administration, an employer’s failure to comply with its obligations on pay transparency (recruitment, information on pay levels and the professional equality index) will have a significant impact on pay discrimination disputes: employees will no longer have to present evidence giving rise to a presumption of such discrimination. The burden of proof will thus be fully reversed: it will be for the employer to prove the absence of discrimination. An employer that does not comply with pay transparency obligations will therefore be in a very weak position in the event of a dispute relating to pay discrimination.

Reminder: pay transparency in current litigation
Even before the directive, the Cour de cassation already allows judges to order the employer to disclose the payslips of colleagues of a female employee alleging unequal pay (Cass. Soc. 8 March 2023, n°21‑12.492). In the context of a dispute, it is therefore sufficient for the employee to allege an inequality to obtain the compulsory disclosure of colleagues’ payslips. The judge must nevertheless ensure that this disclosure complies with the principle of data minimisation, by ordering the redaction of non‑essential information and limiting the use of the documents to the proceedings in question (Cass. Soc. 3 November 2024, n°21‑20.979).

How to prepare for its implementation?
Although the timetable for adopting the law is currently disrupted by governmental instability, preparatory work on the text, including consultations with social partners, began in May 2025. While it is uncertain that the transposition deadline of 7 June 2026 will be met, companies would be well advised, from the beginning of 2026, to start preparing for pay transparency in order to avoid the consequences of rushed compliance or the disclosure of pay gaps that might appear unjustified.

To effectively anticipate the entry into force of the directive, companies can already undertake several structural actions:

• Audit existing remuneration policies to identify any potential gaps and, where appropriate, implement corrective measures.

• Define objective, neutral and non‑discriminatory criteria to determine pay, its progression and the remuneration levels within the company.

• Identify relevant pay comparison panels, in line with collective bargaining classifications, in order to be ready to respond to information requests.