EU Pay Transparency National Framework

Report on National Framework for EU Pay Transparency Directive in Greece (Draft 2026)

Overview

The European Union has taken a significant step towards achieving gender pay equality with the adoption of Directive (EU) 2023/970, commonly known as the EU Pay Transparency Directive. This landmark legislation, which entered into force on June 6, 2023, aims to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through enhanced pay transparency and robust enforcement mechanisms. As a Member State of the European Union, Greece is mandated to transpose this Directive into its national legal framework by June 7, 2026. The Greek government is currently in the process of developing this national framework, with a drafting committee established by the Ministry of Labour reviewing the transposition. While the specific details of the Greek draft law are not yet publicly available, the national framework will necessarily align with the minimum requirements set out in the EU Directive. It is important to note that Greece already has constitutional and legal guarantees for equal pay for equal work or work of equal value under Article 22 of its Constitution and Law 1414/1984, with the National Action Plan on Gender Equality (2021–2025) further emphasizing gender-neutral remuneration practices. The upcoming national framework will build upon these existing principles, introducing more stringent transparency and enforcement measures. The overarching goal of the EU Pay Transparency Directive, and consequently the Greek national framework, is to combat pay discrimination and reduce the persistent gender pay gap. By increasing transparency around pay structures and empowering employees with information, the legislation seeks to facilitate the identification and rectification of unjustified pay disparities, fostering a more equitable and transparent work environment across Greece.

Key Requirements

The Greek national framework, once enacted, will incorporate several key requirements derived from the EU Pay Transparency Directive, fundamentally altering how employers manage and communicate remuneration. These requirements are designed to ensure transparency at every stage of the employment relationship:

• Pay Transparency Prior to Employment: Employers will be obligated to provide job applicants with information about the starting pay or pay range for a position. This information must be disclosed either in the job posting itself or communicated to the applicant before the job interview. Furthermore, employers will be prohibited from asking job candidates about their salary history from previous employment relationships. Job titles and vacancy notices must also be gender-neutral, and recruitment processes must be non-discriminatory.

• Pay Transparency During Employment: Existing employees will gain enhanced rights to information regarding their remuneration. They will have the right to request and receive information, in writing, on their individual pay level and the average pay levels, broken down by gender, for categories of workers performing the same work or work of equal value. Employers will also be required to make the criteria used to determine pay, pay levels, and career progression easily accessible to their workers. These criteria must be objective and gender-neutral. Crucially, contractual terms that restrict workers from disclosing their pay for the purpose of enforcing their right to equal pay (i.e., pay secrecy clauses) will be prohibited.

• Gender Pay Gap Reporting: Employers meeting certain headcount thresholds will be required to regularly report on their gender pay gaps. This reporting will include detailed information such as the overall mean and median gender pay gaps, mean and median pay gaps in complementary or variable components (bonuses), the proportion of female and male workers receiving such components, and the proportion of female and male workers in each pay quartile. The reporting obligations will be staggered based on company size, with larger companies reporting earlier and more frequently.

• Joint Pay Assessment: If an employer's gender pay gap report reveals a difference in the average pay level between female and male workers of at least 5% in any category of workers, and this gap is not justified by objective and gender-neutral factors, the employer will be required to conduct a joint pay assessment. This assessment must be carried out in cooperation with workers' representatives and aims to identify, remedy, and prevent unjustified pay differences.

• Reversal of Burden of Proof: In legal or administrative proceedings concerning pay discrimination, the burden of proof will shift from the employee to the employer. This means that if an employee alleges pay discrimination, the employer will be required to prove that no discrimination occurred and that any pay differences are based on objective, gender-neutral criteria.

• Gender-Neutral Job Evaluation and Classification Systems: Employers will need to establish or review their job evaluation and classification systems to ensure they are based on objective and gender-neutral criteria. This is crucial for assessing whether workers are in a comparable situation in relation to pay and pay progression, considering factors such as skills, effort, responsibility, and working conditions.

Covered Employers

The EU Pay Transparency Directive applies broadly to all employers in both the public and private sectors across the European Union. This means that once the Greek national framework is in force, it will apply to all entities employing individuals within Greece. While the general transparency obligations, such as providing pay ranges to job applicants and making pay progression criteria accessible to employees, will apply to all employers regardless of their size from June 7, 2026, the specific requirements for gender pay gap reporting are tiered based on headcount. The Directive sets the following thresholds for mandatory gender pay gap reporting:

• Employers with 250 or more employees will be required to report annually.
• Employers with 150 to 249 employees will be required to report every three years.
• Employers with 100 to 149 employees will also be required to report every three years, with their first reporting obligation commencing later.

It is important to note that the 100-employee threshold applies to each EU country individually. Member States, including Greece, have the flexibility to introduce stricter provisions, such as requiring reporting from smaller employers or increasing the frequency of reporting for any type of employer. Therefore, the final Greek legislation might set lower employee thresholds for reporting obligations.

Employee Rights

The Greek national framework, transposing the EU Pay Transparency Directive, will significantly enhance employee rights concerning pay equity and transparency. These rights are designed to empower individuals to challenge potential pay discrimination and ensure fair remuneration. Key employee rights will include:

• Right to Information on Pay Ranges: Job applicants will have the right to receive information about the starting pay or pay range for a role before employment, ensuring transparent and informed negotiations.

• Right to Information on Pay Levels and Progression: Employees will have the right to request and receive information about their individual pay level and the average pay levels, broken down by gender, for categories of workers performing the same work or work of equal value. Employers must also make the objective and gender-neutral criteria for pay and career progression easily accessible to all employees.

• Freedom from Pay Secrecy Clauses: Any contractual terms that restrict workers from disclosing their pay for the purpose of enforcing their right to equal pay will be prohibited. This ensures that employees can openly discuss their remuneration to identify and address potential disparities.

• Right to Compensation for Discrimination: Workers who suffer gender-based pay discrimination will be entitled to full compensation, which may include back pay, related bonuses or payments in kind, compensation for lost opportunities, and non-material damage, plus interest. Member States are prohibited from setting an upper limit on the compensation that can be awarded.

• Access to Justice and Support: Employees will have the right to access justice, and workers' representatives (such as trade unions) or equality bodies may act on behalf of employees in legal or administrative proceedings related to pay discrimination.

Penalties

The EU Pay Transparency Directive mandates that Member States establish penalties for non-compliance that are "effective, proportionate, and dissuasive." While the specific penalty amounts and structures will be determined by the Greek national legislation, they are expected to be substantial to ensure adherence to the new transparency rules. Potential penalties that Greece may introduce, in line with the Directive's framework and practices in other Member States, could include:

• Financial Penalties: Administrative fines are a likely consequence for non-compliance. These fines could be significant, potentially reaching up to 4% of an employer's annual turnover, although specific amounts will vary depending on the nature and severity of the infringement. Penalties may also differentiate between procedural failures (e.g., late reporting) and substantive failures (e.g., not addressing unjustified pay gaps).

• Employee Compensation: As noted in the employee rights section, workers who experience pay discrimination will be entitled to full and uncapped compensation for damages suffered. This includes back pay, bonuses, and other related payments.

• Exclusion from Public Procurement: Non-compliant employers may face exclusion from public tender procedures for a certain period, impacting their ability to secure public contracts.

• Reputational Damage: Non-compliance, particularly with public reporting obligations, can lead to significant reputational damage, affecting brand image, recruitment efforts, and customer relationships.

The reversal of the burden of proof also amplifies litigation risks for employers, as they will bear the responsibility of demonstrating that pay discrimination has not occurred.

Timeline

The timeline for the implementation and enforcement of the pay equity law in Greece is directly linked to the EU Pay Transparency Directive:

• June 6, 2023: The EU Pay Transparency Directive officially entered into force.

• June 7, 2026: This is the critical deadline by which all EU Member States, including Greece, must transpose the Directive into their national laws. From this date, "day one" employer obligations, such as pay transparency for job applicants and employees' right to information, will apply regardless of employer size.

• June 7, 2027: Companies in Greece with 150 or more employees will be required to submit their first gender pay gap report, covering payroll data from the calendar year 2026.

• Subsequent Reporting Deadlines:

  • Employers with 250 or more employees will report annually.
  • Employers with 150 to 249 employees will report every three years.
  • Employers with 100 to 149 employees will report every three years, with their first report due by June 2031, covering 2030 data.

Given that the Greek national framework is currently in a draft stage, employers should anticipate that the specific legislative text will be published in early 2026 to meet the June 7, 2026, transposition deadline.

Compliance Steps

To prepare for the implementation of the Greek national framework for the EU Pay Transparency Directive, employers should proactively take several steps to ensure compliance and mitigate potential risks. These steps are crucial, especially as the specific details of the Greek law are finalized:

• Conduct a Comprehensive Pay Audit: Perform an internal audit to establish baseline gender pay gap data. This involves analyzing current pay structures, identifying any existing pay disparities, and understanding the underlying reasons for these gaps.

• Review and Update Job Descriptions and Classification Systems: Ensure that all job descriptions and classification systems are objective, gender-neutral, and accurately reflect the skills, effort, responsibility, and working conditions required for each role. This is fundamental for establishing "work of equal value."

• Establish Transparent and Gender-Neutral Pay Structures: Develop clear, objective, and gender-neutral criteria for determining pay levels and career progression. These criteria should be easily accessible to all employees.

• Implement Robust Data Tracking Systems: Set up or upgrade systems to efficiently collect and track gender-disaggregated pay data. This will be essential for meeting the mandatory gender pay gap reporting requirements.

• Revise Recruitment Policies and Procedures: Update recruitment processes to include salary ranges in job advertisements or provide this information before interviews. Crucially, eliminate any practices that involve asking candidates about their salary history.

• Review Employment Contracts and Policies: Identify and remove any "pay secrecy" clauses from employment contracts or company policies that restrict employees from discussing their pay.

• Train HR and Management: Provide comprehensive training to HR professionals, hiring managers, and other relevant personnel on the new legal requirements, the importance of pay equity, and how to implement transparent and non-discriminatory pay practices.

• Prepare for Communication with Employees and Worker Representatives: Develop clear communication strategies to inform employees about their new rights and the company's pay transparency policies. For organizations with worker representatives, establish a framework for cooperation on equal pay matters, including joint pay assessments if required.

Proactive engagement with these steps will not only ensure compliance with the upcoming Greek pay equity law but also foster a more fair, transparent, and equitable workplace culture.

References

• Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023 on strengthening the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms.
• Various legal and HR publications discussing the EU Pay Transparency Directive and its transposition into national laws across Member States.