EEurope

Europe to End “Salary Secrecy”: Employee Salaries to Become Public by 2026

  • September 9, 2024



Europe to End “Salary Secrecy”: Employee Salaries to Become Public by 2026

Europe to End “Salary Secrecy”: Employee Salaries to Become Public by 2026



by oozn

24 comments

  6. It has been one year since the enactment of Directive 2023/970 of the European Parliament, also known as the Salary Transparency Law. This law will require all companies to make public the salary ranges of all their employees. In other words, you will know if your colleagues receive the same salary as you for doing the same job.

    With this measure, the European Directive aims to strengthen equal pay between men and women for work of equal value, setting the gender pay gap at a maximum of 5%, compared to the current European average of 13%. The law came into force in June 2023, but its implementation will be progressive depending on the number of employees in the company until June 2026.

    # Salary Transparency for Employees

    The European Salary Directive imposes a series of requirements on companies regarding salary transparency that goes beyond their current workforce. Given that the main objective of the measure is to reduce salary inequality, companies will have to make salaries or salary ranges for each position public.

    In addition, they will have to share with their employees the criteria used to set these remunerations. They will also have to provide information on salary inequalities within the company, broken down by gender.

    # Job Offers with Salary by Law

    The directive will also affect candidates seeking to join the workforce, as the European regulation will require companies to indicate the salary or salary range corresponding to the position in job offers. According to a [PayScale report from 2021](https://www.payscale.com/research/US/Job=Software_Engineer/Salary), only 12.6% of job offers published worldwide included the salary.

    The regulations will prohibit employers from asking candidates about their salary range in previous jobs. In this way, one of the companies’ greatest bargaining chips for salary negotiation is eliminated, as they do not have a base reference on which to negotiate the candidate’s salary downwards.

    # Employees Will Know How Much Their Colleagues Earn

    As of 2026, employees will have the right to request and receive in writing information about their individual salary and the average salary ranges of colleagues performing the same job or one of equal value.

    This request must be formalized through the legal representatives of the workers, works councils, or an equality body. In order to maintain competitiveness and privacy, the European directive sets access limits to the information, prohibiting the request of this information for purposes other than the defense of their salary equality rights.

    However, the regulations leave a significant gap by prohibiting companies from imposing clauses in their employees’ contracts that restrict the disclosure of such information. Therefore, once the request is justified, the company would be exposed to employees disseminating that information.

  10. Transparency doesn’t only benefit employees, it most definitely will benefit employers too, with the former group having less capacity to adapt to the new situation of information symmetry than the later.

    Get ready for some next-level, neigh impossible to prove collusion by employers, pushing salaries down in sectors with work that is incompatible with remote/hybrid work. Especially in countries where the housing market is overheated. And a long etc of other side-effects that aren’t mentioned in the article.

  11. Very interesting.

    Day one will be emotionally challenging… and the effects are somewhat unpredictable, but I’m curious to find out what they’ll be. Prediction: gender pay may not be the main show.

  12. One of the best regulations the EU has enforced. It’s extremely important information for any employee.

  13. It’s a pain in the rear here in Ireland. I’ve gone through layers of job interviews in the past to find out that the salary being offered was less than what I was on at the time. Even worse, they knew this and continued the charade!

    No salary detail – no interviews.

    I hate the whole “and what do you think would be a good salary range for this position” or expecting you to negotiate on the spot too.

  16. I don’t particularly want my colleagues knowing how much I make because I’m probably making more than the other guys at my level 

  17. This is seriously good legislation. In Europe, salaries are very much hidden so you have no idea what your role is worth and companies will serious underpay you if they can.

    By knowing what others are getting paid for for a particular role, it will encourage inflation of salaries because people can easily see up front what others are offering and only apply to roles that are offering a good salary, forcing companies who pay poorly to raise their offers to compete. You could argue that it could cause downward pressure as well, but it won’t, because companies already know this information and press down as hard as possible. This legislation will be an equaliser.

  20. It’s salary ranges. They recently enacted something similar in the U.S. for job listings. But the companies “game” the system by posting large ranges, like $85,000 – $150,000.

    So they can offer you at the bottom end of the range if they wanted. Plus you don’t what others in identical positions earn within the range.

    Somewhat helpful but not really.

  22. It should also include monies eared from capital gains otherwise it’s mostly just a law which mostly reveals the income of the poor and middle class?

  23. > they do not have a base reference on which to negotiate the candidate’s salary downwards.

    This part is very naive. Most large companies share employees information, including salary information, with consulting companies. They literally have access to a worldwide database with every candidate’s employment history.

  24. It is already mandatory in Lithuania and it’s fantastic.

    Edit, one bad side like what we see in the us are crazy salary ranges such as 70k-150k for a position

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