Pay transparency – building internal processes

Starting in June, what data do we need to provide if an employee requests information under Article 7?

The employee should receive information about their own pay level and the average pay levels for workers performing the same work or work of equal value, broken down by gender. In practice, employers should prepare gross remuneration data for the last full annual period, including both fixed and variable components. The comparison should be based on objective job categories or work of equal value, and the response should present averages rather than individual salaries.

What happens if the category is very small, for example one male and one female employee?

The right to information still exists, but GDPR must also be respected. If a very small comparison group would make it easy to identify another person’s salary, the employer should avoid disclosing identifiable pay data. A practical solution is to broaden the comparison group, use aggregated information, or provide the closest valid comparison that protects privacy while still meeting the transparency obligation.

What happens if a company chooses not to comply and simply allocates budget for fines instead of changing how it works?

This is a high-risk approach. The Directive provides for effective, proportionate, and dissuasive penalties at national level, but the real exposure goes beyond fines. Employers may face employee claims, compensation or back pay, a reversed burden of proof in discrimination cases, reputational damage, and broader scrutiny from works councils, unions, or regulators. In the worst-case scenario, the total cost of non-compliance becomes significantly higher than the cost of fixing the underlying pay practices.

If a new employee is hired on a much higher salary than current colleagues, what should we do?

The key is documentation. A higher starting salary may be justified, for example due to market conditions, experience, qualifications, or business-critical skills, but the reasons should be documented clearly and consistently. If the gap cannot be explained through objective, gender-neutral factors, it increases the risk of future pay discrimination challenges. Employers should therefore make sure both the rationale and the approval process are recorded.

Does GDPR override pay transparency for small groups? Do we need to expand the category of workers before sharing information?

GDPR does not cancel the pay transparency obligation, but it does affect how the information is shared. Employers should not disclose personal data in a way that identifies another employee. Where small groups create that risk, the comparison category should usually be expanded or the information should be further aggregated. The goal is to balance transparency rights with data protection requirements in a practical and defensible way.

How should companies handle Directive requirements if local legislation has not yet been transposed?

As a general rule, the Directive is binding on Member States and becomes directly operational for employers through national transposition. Until local law is in place, employers are not usually expected to implement every detail as if the national rules were already adopted. However, delayed transposition is not a good reason to wait. Companies should use the period before implementation to review job architecture, prepare data, define internal request-handling processes, and strengthen documentation so they are ready when the local rules take effect.