The Pay Transparency Directive – in a Scandinavian perspective

The directive is applicable to both public and private companies and includes prohibitions regarding differences in salary based on gender. Further, the directive introduces a requirement for employers to provide information regarding several aspects related to salary and pay gap, including: 

• the gender pay gap;
   
• the gender pay gap in complementary or variable components;
   
• the proportion of female and male workers receiving complementary or variable components;
   
• the proportion of female and male workers in each quartile pay band;
   
• the gender pay gap between workers by categories of workers broken down by ordinary basic wage or salary and complementary or variable components. 
   

Employers with 250 employees or more shall provide the information annually, while companies with less than 250 employees shall provide the information every three years. The information shall be confirmed by the employer, after consulting the employees' representatives. The information shall be made public, and employees, employees' representatives, labour inspectorates and equality bodies shall have the right to ask employers for additional clarifications and details regarding any of the data provided.

Below, we have looked closer at how the directive will affect the Scandinavian countries.

As an EU member state, Denmark is obliged to implement the Pay Transparency Directive into national law by 7 June 2026. At the time of writing, no draft bill has yet been presented by the government. Denmark already has rules prohibiting gender-based pay discrimination and, for certain employers with at least 35 employees and at least 10 women and 10 men in the same work function, requirements to maintain and report gender-segregated pay statistics. However, the current Danish framework does not contain the full range of transparency measures laid down in the directive, such as systematic disclosure of pay ranges in job advertisements, a general prohibition on asking applicants about their prior salary history, individual rights of access to pay information, and mandatory joint pay assessments.

The impact of the directive is therefore likely to be substantial in Denmark as the implementation is expected to introduce several new transparency and reporting duties for employers, which may lead to a material change in how Danish companies must organize, document and communicate their pay structures. 

As an EU member state, Sweden is also required to implement the Pay Transparency Directive into national law by 7 June 2026. At the time of writing, the government has not yet presented a draft bill. The government has appointed investigator to identify need for legislative change. The investigator presented their assessment in their report "Implementation of the Pay Transparency Directive" (SOU 2024:40), in May 2024. The report is currently being considered by the government and relevant stakeholders as part of the legislative process.

According to the analysis in SOU 2024:40 Sweden has a relatively comprehensive framework fulfilling several key requirements of the Directive.

Sweden already has legislation addressing pay discrimination and gender equality in the workplace. The Discrimination Act requires all employers to conduct annual pay mapping, including analyzing differences between women and men performing equal or equivalent work. Employers must also work continuously to prevent discrimination and promote equal rights in cooperation with employees, and the prohibition of discrimination covers job applicants as well as employees.

However, the existing Swedish legislation does not yet include the full range of transparency measures required by the Directive. The investigator proposes a new chapter in the Discrimination Act establishing comprehensive rights to pay transparency. Under the proposal, employers would be required to inform job applicants about starting salary or salary ranges and relevant collective agreement provisions, and employers would be prohibited from asking job applicants about their salary history. Existing employees would have the right to receive written information regarding their individual pay and average pay disaggregated by gender for those performing equal or equivalent work.

The report proposes that existing pay mapping requirements be strengthened, requiring employers with at least 10 employees to prepare written pay mapping including action plans and follow-up measures. New pay reporting obligations would apply to employers with at least 250 employees who would report annually, and employers with 100–249 employees, who would report every three years. Where pay differences of at least 5 per cent are identified, employers would be required either to justify such differences with objective criteria or to outline remedial measures.

Several procedural innovations are also proposed, including a new declaratory action regarding discrimination, reversed burden of proof where employers have failed in their transparency obligations, and a three-year limitation period. In addition, new sanctions are proposed, including damages for breaches of transparency rules and administrative penalties for non-submission to the Equality Ombudsman. Protection against reprisals would be extended to cover those exercising transparency rights.

The Equality Ombudsman would be designated as the monitoring body, with an expanded mandate to receive and publish reports and compile statistical data. The proposed legislation would enter into force on 1 June 2026, with pay reporting obligations commencing in 2027 for employers with 150 or more employees, and in 2031 for employers with 100–149 employees.

As EU directives are not automatically applicable for Norway, any directive within the scope of the EEA Agreement must be incorporated into the EEA Agreement. This incorporation process has been initiated but is not yet completed. Following incorporation into the EEA Agreement, Norwegian legislation must be amended accordingly. Even though there already are provisions in Norwegian legislation that in part corresponds to the Pay Transparency Directive, further adaptions will be necessary.

Norwegian legislation already prohibits gender-based discrimination, including salary differences based on gender. The Equality and Anti-Discrimination Act requires companies to investigate discrimination risks and barriers to equality, including reviewing pay conditions by gender and involuntary part-time work biennially. This applies to all public companies and private companies with more than 50 employees, or those with 20-50 employees if requested by employees or their representatives.

The information must be published in a publicly available document, and employees, employee representatives, certain public bodies, and researchers may request additional information regarding employer compliance.

As these rules do not fully implement the Pay Transparency Directive requirements, further legislative adaptions are expected, though timing remains uncertain.