Despite decades of legislation championing equal pay, women in the European Union still earn, on average, 12 per cent less than their male counterparts. This disparity reflects persistent gender gaps in the labour market: women continue to work in lower-paid professions, sectors, and companies, signalling that structural inequalities in pay setting remain deeply embedded across the continent. This is a disparity that persists even after accounting for working hours and professional roles—a clear signal that gender bias remain deeply embedded in pay-setting structures across the continent.
The EU’s Pay Transparency Directive, due for transposition by June 2026, aims to finally tackle one root cause of the gender pay gap – direct and indirect pay discrimination – by making pay systems open and understandable. Yet, with the deadline looming, a sense of urgency appears to be absent. So far, only one region—the Fédération Wallonie-Bruxelles in Belgium—has comprehensively implemented the Directive. As other Member States slowly work towards compliance, it’s worth asking: what evidence do we have that pay transparency actually works, and how can national governments ensure they don’t simply tick a box, but actually reduce the gender pay gap?
Lessons from the vanguard
While the Directive marks a new, unified European approach, pay transparency is not a new concept. A handful of ‘frontrunner’ Member States—Denmark, Finland, Italy, and Sweden—began implementing various measures as far back as the late 1990s and early 2000s. A second wave followed in the 2010s, and a third, prompted by a 2014 European Commission recommendation, saw countries like Germany, Ireland, and Spain introduce legislation between 2017 and 2021.
Despite their importance, these early measures have rarely been evaluated. With only Germany and Sweden having recently assessed their measures, leaving policymakers across Europe to move forward, with limited evidence on what works, why, and under what circumstances.
Academic research has started to fill the void, but so far focuses on short-term impacts—typically one or two years—and is confined to companies around reporting thresholds. The medium- and long-term consequences of these policies, and their differential impact across various sectors or company sizes, remain largely unknown.
Furthermore, accessing the data itself can be a challenge. In Ireland, for instance, companies publish their pay gap reports on their own websites, making systematic analysis virtually impossible. A central portal has been set up in the meantime —three years after the law came into force – but is not mandatory to use yet. Conversely, in countries like Austria, Lithuania and Luxembourg, current reporting measures are legally designed not to be publicly available, undermining the very principle of public scrutiny.
Advocating active disclosure and public transparency
Despite the patchy evidence, a first consensus is emerging on the design features that distinguish effective transparency measures from toothless ones.
The most potent laws are those that demand active disclosure of pay outcome information from employers to their staff, rather than relying on employees to request the information. This simple shift in responsibility is powerful: it transfers the onus of identifying and correcting imbalances from the individual to the organisation, empowering workers and job applicants to negotiate from a position of informed strength.
Secondly, the power of public dissemination cannot be overstated. When pay data via vacancy notes or the pay gaps within companies —are made public, they invite external scrutiny, creating a powerful non-pecuniary incentive for organisations to address disparities before they are exposed or workers to look for other jobs elsewhere. Studies in Denmark and the UK, for example, have demonstrated how gender pay gap reporting requirements can reduce disparities, in part by reducing men’s wage growth to re-balance the scales.
Finally, the content of the disclosure is paramount. Simpler reports on how pay is determined are less impactful than detailed disclosures of the actual pay gaps themselves. The data must be granular to be effective: breakdowns should include not only occupation and level but also basic versus variable pay, and incorporate all forms of employment, including agency workers. The more detailed the information, the harder it is to misinterpret, and the easier it is for companies and workers alike to pinpoint the source of the problem. Indeed, also managers reported finding more in-depth pay audits beneficial compared to simpler pay reports, and the research points to a range of benefits for companies – lower turnover, more labour satisfaction owed to increased fairness, no impact on productivity – all of which can enhance competitiveness through better skills development, talent retention and employee engagement, provided the measures are well implemented and communicated to staff.
Time to pick up the pace and go beyond half-measures
The EU Directive, with its range of instruments, is designed to address many of the structural and design shortcomings identified in national systems. It requires Member States to report on implementation and impact by 2031, promising to fix the evaluation deficit that has plagued this policy area for years.
However, the current pace of transposition is somewhat slow, with much activity ongoing but not yet fully visible. . As of late 2025, just over half of Member States have concrete and documented work underway, and only one regional government has fully crossed the finish line. While Czechia, Malta, and Poland have implemented partial measures—such as pay secrecy bans or pre-employment transparency—most others are still in the preparatory phase, issuing draft bills, holding consultations or establishing working groups.
The June 2026 deadline is a mandate. Member States can draw on clear guidance emerging from the research which should make their life easier: move beyond passive measures, insist on public, detailed reporting, and embrace the full scope set out by the directive, rather than portions of it. The Directive, agreed by Member States and the European Parliament in 2023, provides the legal framework and political cover; now, governments must demonstrate the political will to implement it in national legislation, tailored to their national realities. Social partners at all levels will be key actors to ensure the objectives can be put into practice
Systematic evaluation must become standard practice to refine policies as they mature. But for now, the message to Europe’s capitals is clear: a 12% pay gap does not correlate with the EU’s commitment to equality. Profound pay transparency is not a bureaucratic requirement; it is a critical tool for pay equality. But it will only reduce gender pay gaps if the instruments are well-designed and rigorously implemented. The time for half-measures is over.
Marianna Baggio is a research officer at Eurofound’s social policies unit.
Christine Aumayr-Pintar is a senior research manager in the Working Life unit at Eurofound. She coordinates Eurofound’s research on social dialogue and industrial relations and oversees the Network of Eurofound Correspondents (NEC).
