EU Pay Transparency Directive – Consequences of the Failure to Transpose into National Law by the Deadline of 7 June 2026

The deadline for transposing the EU Pay Transparency Directive (Directive (EU) 2023/970) into national law expired on 7 June 2026. The objective of the Directive is to strengthen the EU law principle of equal pay for men and women for equal work or work of equal value through increased transparency and improved enforcement mechanisms.

As the German legislator has not yet transposed the European directive into German law, the question arises for employers as to what legal consequences result from this and whether there is already a need for action at this stage.

Current Legal Situation

The Pay Transparency Directive is – like any EU directive – addressed in principle to the Member States and requires transposition into national law. For private employers, the expiry of the transposition deadline therefore does not automatically mean that all provisions of the Directive apply directly. However, this does not mean that employers can disregard the requirements of the Directive until national transposition takes place. The situation may be different for public employers, insofar as individual provisions are sufficiently precise and unconditional in their formulation. Nevertheless, the lack of transposition does not create a legal vacuum.

The principle of equal pay for men and women for equal work or work of equal value under Article 157 TFEU already applies directly today. Furthermore, the courts are obliged to interpret existing national law – in particular the Pay Transparency Act (Entgelttransparenzgesetz) – in conformity with EU law. The objectives of the Directive can therefore already influence labour court proceedings at this stage.

Even though there is currently no unrestricted direct binding of private employers to all requirements of the Directive, employment law literature already recommends a review of existing remuneration systems. With the subsequent transposition into national law and further clarification through case law, the practical significance of the Directive is likely to continue to increase.

Recommendations for Action for Employers

1. Review remuneration systems at an early stage

Even though the national transposition legislation is still pending, companies should already review their existing remuneration systems now. Particular attention should be paid to whether pay decisions are based on objective, gender-neutral, and transparent criteria. An early review facilitates the subsequent implementation of statutory requirements and can at the same time help to identify and eliminate existing discrimination risks at an early stage. At the same time, potential discrimination risks can be reduced.

2. Strengthen transparency and documentation processes

The Pay Transparency Directive places a significantly stronger focus on transparent pay decisions. Companies should therefore already ensure that the relevant criteria for pay determination and salary development are documented. Transparent documentation not only facilitates the subsequent implementation of the Directive but can also provide an important basis for demonstrating non-discriminatory pay decisions in the event of information requests or labour court proceedings.

3. Prepare internal processes for future information entitlements

The Directive provides for extended information and disclosure rights. Companies should therefore examine at an early stage whether existing HR and remuneration processes are suitable for handling such requests efficiently and in a legally compliant manner. This includes in particular a review of responsibilities, internal procedures, and the availability of relevant remuneration data.

4. Monitor case law and legislation closely

Further developments remain dynamic. In addition to the still-pending transposition legislation, labour court case law in particular will continue to clarify the practical application of pay transparency. The Federal Labour Court, in its judgment of 19 February 2026 (8 AZR 83/25), further defined the information entitlement under the Pay Transparency Act and emphasised its establishment-related character. Even though the decision still concerns the current law, it illustrates the growing importance of transparent remuneration structures.

5. Do not postpone preparatory measures until the transposition legislation

Even though no national transposition legislation is currently in place, it is advisable to initiate necessary preparatory measures now. While the specific content of future transposition legislation remains to be seen, it is likely to be largely guided by the EU law requirements. Companies that review their remuneration structures and internal processes at an early stage can respond more quickly to the new statutory requirements and significantly reduce the subsequent implementation effort.

Conclusion

The failure to transpose the EU Pay Transparency Directive by the deadline does not mean that all Directive requirements directly apply to private employers. Nevertheless, companies should not underestimate the development. The equal pay principle under Article 157 TFEU, which already applies directly, as well as the interpretation of national law in conformity with EU law, already lend practical relevance to the objectives of the Directive today. Even without the national transposition legislation, it is therefore advisable to review existing remuneration systems and internal HR processes for their compatibility with the future transparency requirements now and to prepare necessary adjustments at an early stage.