With the expansion, HR departments gain better insight into pay disparities within the organization, can explain or correct deviations, and are better prepared for reporting obligations that will apply from 2027.
Transparency is no longer a policy choice
The EU directive on pay transparency (EU directive 2023/970) requires employers to actively work towards equal pay. This requires more than just good intentions. Organizations must have reliable data, clear definitions of roles, and insight into how pay decisions are made.
Employers who cannot substantiate or address pay disparities risk legal action and sanctions. The directive thus makes pay transparency a fixed part of HR policy.
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Three obligations for HR
The directive places three concrete responsibilities on employers:
1. Reporting on pay disparities
Organizations must periodically report on pay disparities between men and women. In case of a difference of five percent or more, a joint pay analysis is mandatory. SAP supports HR teams in analyzing pay data and identifying possible causes, based on personnel and salary data in one central location.
2. Information for employees
Employees have the right to request insight into the average pay within their job category, broken down by gender. Through self-service, they can directly access this information, along with their own salary data. This requires clear definitions, consistent data, and transparent explanations from HR.
3. Transparency for candidates
Employers must mention salary ranges in job postings or at the latest before the first job interview. Requesting salary history is prohibited. HR departments must adjust their recruitment processes accordingly and ensure that salary information is communicated accurately and consistently.
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Data quality as a prerequisite
The implementation of the directive will be phased. Member states must incorporate the rules into national legislation by June 2026 at the latest. For organizations with 150 employees or more, the first reporting obligation will apply from 2027, based on data from 2026.
This means that HR departments must already invest in data quality, job evaluation, and clear pay structures. Without reliable data, transparency becomes difficult, both towards employees and regulators.
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More trust and less turnover
According to Bart Van der Biest, Managing Director of SAP Benelux, pay transparency also offers opportunities: 'Organizations that invest in insight and measurability in a timely manner not only comply with the law but also provide employees with clarity about their pay and career prospects. This strengthens trust and contributes to talent retention.'
SAP is organizing a webinar Ready on Day One: Confidently Navigate the EU Pay Transparency Directive, where HR professionals will be updated on the impact of the directive and practical considerations for preparation.
