Greater pay transparency

Authors: Fabian Blumberger and Anna Obereder

Waiting for the national implementation and which preparations can already make sense now.

We have already reported here that the EU, with the Pay Transparency Directive (Directive [EU] 2023/970), aims to move closer to the goal of “equal pay for equal work.” Now, the end of the implementation period on June 7th, 2026, is drawing ever closer. However, a draft for the national implementation is not yet available.

It is therefore to be expected that the amendments to Austrian law, once implemented, will take effect immediately and that companies will have to implement them without a lengthy lead time. Even though it remains unclear exactly how the EU legal requirements will be implemented at the national level, we provide a brief overview below of what preparations may already be advisable from a business perspective:

Transparent compensation structures: In the future, companies must ensure that their pay systems are based on objective, gender-neutral criteria. This includes, for example, the evaluation of activities, classification systems, and regulations on salary increases. An early analysis of the existing salary structures makes it possible to identify any inequalities and correct them in a timely manner.

Adjustment of job postings: Employers will be required to disclose the starting salary or a salary range prior to the job interview. While Austrian law already requires the disclosure of the minimum wage under collective bargaining agreements, the directive goes further and mandates the disclosure of the actual salary offered.

Rights to information and documentation: Employees will have the right to request information about their individual salary as well as the average salaries – broken down by gender – for comparable roles. Employers must respond to such requests within two months. Careful documentation of pay structures significantly facilitates compliance with these obligations.

Reporting obligations starting in 2027

For larger companies, the directive establishes regular reporting obligations regarding the gender pay gap. Companies with 250 or more employees must report for the first time by June 7th, 2027, and annually thereafter. For companies with 150 to 249 employees, the same deadline applies, followed by reporting every three years. In practice, this means that affected companies should begin collecting and preparing the necessary data in the coming months. If a report reveals an unjustified pay gap of at least 5%, a pay assessment must be conducted in collaboration with the works council.

For companies with 100 to 149 employees, there is still a little more time, because according to EU law they only have to report for the first time by June 2031. Whether small companies will also be subject to a reporting obligation is up to national legislation and remains – like many other aspects – eagerly awaited.

Our support

The team at Haslinger Nagele is happy to assist you with the legal assessment of your existing compensation systems, the adaptation of internal processes, and the implementation of the new transparency requirements in your company. Please feel free to contact our labor law expert, Fabian Blumberger, with your specific concerns.