EU Pay Transparency: Lessons for Employers from First Three Member States’ Legislation

Takeaways

• Legislation in Italy, Lithuania and Slovakia transposing the EU Pay Transparency Directive show core alignment but meaningful country-specific differences, with Italy and Slovakia moving from policy discussions to enforceable pay transparency obligations.
• Employers face expanded obligations, including pay transparency in recruitment, responding to employee pay information requests, implementing objective, gender-neutral pay structures, and preparing for reporting and potential pay gap scrutiny.
• For global companies with operations in the EU, these first transpositions signal increased compliance complexity and the need to track country-by-country variations.

Article

The EU Pay Transparency Directive transpositions adopted by Italy, Lithuania, and Slovakia provide employers with a look at the compliance landscape emerging across Europe.

For multinational employers, they highlight the practical measures organizations should be implementing throughout the EU.

The article discusses the three countries’ implementing laws.

Slovakia

On April 15, 2026, Slovakia adopted its Equal Pay Act, becoming the first EU Member State to formally transpose the Directive. The Act went into effect on the transposition deadline, June 7, 2026, and requires employers to quickly establish compliant pay practices. Indeed, compliant pay practices must be established by July 31, 2026. The first reporting deadline is June 7, 2027, applicable to employers with at least 150 employees, and the report must cover the period from Aug. 1, 2026, until Dec. 31, 2026.

The Act generally follows the Directive in that employers must evaluate pay structures, prepare for transparency obligations during recruitment, and ensure that compensation decisions are supported by objective, gender-neutral criteria.

However, in an example of gold-plating (going beyond the Directive’s protections), the Act allows employees of any gender to compare themselves to other employees doing the same work or work of equal value. This is a departure from the Directive, which contemplates a right to compare to a member of a different sex.

In addition, the employer must respond to the employee’s request for pay information within two months of the request. Moreover, if the employee raises further questions about inaccurate or incomplete pay information, the employer must provide a substantive response within 30 days.

Finally, Slovakia places a two-month deadline on any applicable joint pay assessments.

Lithuania

On May 21, 2026, the Lithuanian Parliament adopted Law No. XV-969, transposing the Directive. While most provisions of the law became effective on June 7, 2026, Lithuania adopted a phased implementation approach that gives employers additional time to operationalize certain requirements.

Most notably, employers have until Dec. 31, 2026, to align compensation systems with the new requirements for objective and gender neutral criteria. Lithuania’s reporting and data-submission obligations will not take effect until Jan. 1, 2027. The State Social Insurance Fund Board (SoDRA), however, will calculate the required gender pay gap indicators from employer-submitted payroll data (rather than placing the full calculation burden on employers). Employers must submit monthly data on pay, working time, and job groups. SoDRA will then generate and distribute the indicators, thereby taking some administrative burdens away from the companies. This approach may provide a useful model for other Member States seeking to balance compliance obligations with practical implementation challenges.

Although the Lithuanian legislation largely tracks the Directive, employers should not view the phased timeline as an opportunity to delay preparations. Organizations should use the additional implementation period to assess pay practices, review job evaluation methodologies, and establish the processes necessary to respond to future employee information requests and reporting obligations.

Italy

Italy’s transposition of the Directive, Legislative Decree May 7, 2026, no. 96, also went into effect on June 7, 2026, and largely aligns with the Directive. From day one, employers must respond within 60 days to employees’ information requests regarding average pay levels, broken down by gender, for categories of employees performing “equal work” or “work of equal value.” Employees can only make one information request in a 12-month period.

Employers can fulfill their obligation to publish information on pay levels by posting the levels on their intranet or in the restricted area of the company website. However, care must be taken to ensure employees’ privacy regarding their individual pay. Italy’s Ministry of Labor will consult with privacy authorities and then enact decrees regarding the relevant data to be collected and the procedures for collecting and presenting such data.

The Italian transposition bases pay transparency on the classifications defined by national collective bargaining agreements signed by the national trade unions. Significantly, Italy’s transposition defines “equal work” and “work of equal value” using such job classification systems; however, such classifications may be too broad in practice and can lead to larger pay gaps. Therefore, companies must be prepared to overlay internal classification systems where necessary and appropriate to adequately map their workforce and avoid unjustified pay gaps.

The legislation also defines “pay level” for information request purposes as gross annual salary (and corresponding hourly remuneration) calculated using any fixed and continuous pay components. This definition excludes personal, discretionary, or temporary payments that are not applied across the entire category of workers and are based on objective individual criteria.

What Global Employers Should Be Doing Now

It is clear from the examples of Italy, Lithuania, and Slovakia that compliance with the Directive will have common threads across Member States yet will also have some dynamic distinctions.

Based on these three transpositions, and to prepare for broader compliance, employers should consider:

• Conducting pay equity and compensation audits to identify unexplained pay disparities.
• Reviewing job architecture and job evaluation methodologies to ensure they support “equal work” and “work of equal value” analyses.
• Establishing salary ranges and objective pay-setting criteria.
• Preparing recruitment processes for salary transparency requirements and restrictions on salary history inquiries.
• Developing processes to respond to employee requests for pay information.
• Aligning legal, HR, compensation, payroll, and data teams to support future reporting obligations.

Employer Takeaway

Although a majority of the 27 Member States did not transpose the Directive by the June 7, 2026, transposition deadline, the “real-life” examples of transpositions by Italy, Lithuania, and Slovakia make clear that EU pay transparency requirements are here.

While sharing the Directive’s core framework, these laws also illustrate how Member States may introduce unique compliance obligations, timelines, and procedural requirements. Employers should refer to these early examples to build scalable compliance frameworks across Europe while monitoring additional country-specific developments as other Member States finalize their implementing legislation.

Please contact a Jackson Lewis attorney with any questions about these and other legal developments.