The lack of transparency in salaries has been identified as one of the main obstacles to eliminating the gender pay gap, which in 2023 averaged about 12% across the EU. The Pay Transparency Directive, which member states must implement within the next year, offers an opportunity to equalize pay between women and men and to increase transparency in company pay policies. On the other hand, it may reduce employers’ willingness to raise salaries or reward top performers.
“The Pay Transparency Directive will regulate four main areas related to employee management policies. First, recruitment processes and the obligation to disclose salary information to job candidates. This aims to strengthen candidates’ negotiation position and ensure both sides better understand the offer,” said Krzysztof Nowak, CEO of Mercer Poland, in an interview with Newseria agency. “The second area concerns access to information about salaries of women and men performing the same work or work of equal value. Another area is transparency regarding employment conditions, promotion, competency requirements, and broadly understood pay policies—including bonuses and raises. All this should increase transparency of these processes and ultimately improve employers’ ‘professionalism’ in pay management. The fourth area relates to the gender pay gap—the difference between women’s and men’s pay—and requires employers with more than 100 employees to calculate and publish this data.”
Lack of salary transparency is considered a key barrier to closing the pay gap. The new regulations aim to eliminate pay discrimination—i.e., unjustified and unexplained differences in pay between women and men that cannot be justified by objective criteria. In practice, the directive will strengthen women’s position—thanks to these provisions and knowledge of the pay gap, women will be able to expect equal and fair pay conditions. The expert emphasizes that this “equality” must be properly understood—the right to equal pay applies to persons performing the same or equivalent work. These concepts should be broadly interpreted, covering work of similar complexity and requiring comparable competencies, experience, or skills. On the other hand, the directive allows explanations for pay differences between women and men (in simplified terms, “accepting” them) if these result, for example, from differences in skills or individual performance of a specific employee.
According to the directive, by June 2027 companies with more than 150 employees will, for the first time, have to calculate the gender pay gap—the difference in salaries between women and men—and prepare the appropriate report for 2026. Companies with more than 250 employees will have to submit such reports annually, while those with over 150 employees will report every three years. In addition to the obligation to calculate and publish the pay gap data, the directive will enable employees to access information on the average salaries of women and men performing the same or equivalent work. If an employee requests this, the employer will have up to two months to respond. Krzysztof Nowak believes that access to salary information for women and men may be a challenge for employers, as employees and employers interpret this regulation differently.
“Mercer recently asked the LinkedIn community how employees understand their right to access salary information in their companies. Responses almost unanimously showed employees expect to know how much everyone earns in the company, while the directive states employees will have the right to ask for the average salary of women and men doing the same or equivalent jobs,” explained Mercer Poland’s CEO. “That means I won’t know how much my colleague earns, but I will know the average salary for men and women in comparable job groups. So, it remains information about the pay gap between women and men.”
With the directive, recruitment for new positions will change. Employers will have to disclose the salary or salary range already at the candidate interview stage. This will allow job seekers to know what salary to expect before applying for a position.
According to Mercer Poland’s CEO, the pay transparency directive can largely fulfill its purpose—narrowing the pay gap and increasing pay transparency. However, it may also lead to salary flattening and a lack of raises for top performers.
“Many studies show pay differences decrease, but employers are less willing to differentiate raises at all. Fearing the need to explain or discuss with employees, and potentially face negative evaluations, employers often deprive themselves of the right to reward the best and say: ‘For the sake of peace, I won’t differentiate raises.’ I fear this is the worst but unfortunately very likely scenario,” said Krzysztof Nowak. “I hope we stick to the idea that employees contributing more to final results should earn more. Let’s not lose opportunities that would kill our companies’ competitiveness.”
The “Polish Labor Market Barometer” by Personnel Service shows that 42% of Poles support salary disclosure, and 28% favor publishing pay ranges for specific jobs. Mercer’s Global Talent Trends report indicates that fair pay is the second most important reason employees stay with a company after job security. At the same time, 55% of employees worldwide feel they are fairly compensated. Mercer’s research also shows nearly 70% of employers agree candidates expect pay transparency. They know compliance is not only legal but also key to building employer brand. Still, Mercer’s data reveals that only 7% of companies in continental Europe, 5% in Nordic countries, and 1% in the UK have implemented pay transparency strategies, likely due to numerous related challenges.
“One must consider how to respond to questions employees or trade unions might ask—that’s a main challenge of the directive. Another practical issue for companies will be how to compare different roles and people within the company, and by what criteria,” noted Krzysztof Nowak. “Discussions about transparency will occur at the levels of supervisors, line managers, and managers—they will be the first to receive questions from employees and must be equipped with knowledge.”
The expert stresses that companies vary in preparedness for these changes. Many larger employers already manage pay according to established processes, have internal structures, and can compare different jobs and calculate average salaries. Some companies monitor gender pay differences and have promotion procedures in place.
“The key question for the best-prepared companies is how they will complement their pay management processes with communication—making this information accessible to employees. This will be their main challenge,” said the expert. “Certainly, a large group of companies is less prepared and only beginning to prepare for transparency—not salary transparency per se, but transparency of pay conditions and work conditions—and for them, this will be a huge challenge.”
