The Directive (EU) 2023/970 of the European Parliament and of the Council, commonly known as the EU Directive on Pay Transparency and Equality, has recently become a top discussion topic with clients. This is unsurprising, as the deadline for transposing the directive into national law is June 6, 2026. From this date, companies with more than 50 employees will be required to report the so-called pay gap.

It is still unclear whether the reporting will refer to the unadjusted, or "raw," pay gap, or the adjusted pay gap, which accounts for differences in pay among so-called "statistical twins." Regardless of the type of pay gap chosen for reporting, it is known that it should not exceed 5% between the salaries of men and women. A gap above this value will need to be justified by objective criteria or eliminated within six months in cooperation with the social partners (i.e., trade unions).

According to Eurostat's 2023 data, the raw pay gap in Poland was 7.8%, while in the EU it was 12%. In the 2024 Randstad Employer Brand Research conducted by Kantar TNS, only 43% of respondents agreed with the statement that their employer pays the same for the same work. Public opinion commonly holds that the pay gap between women and men is around 20%, as confirmed by Sedlak & Sedlak's research. Therefore, introducing regulations on pay equality and transparency seems to be the right course of action.

The pay gap issue will affect not only companies that consciously practice gender discrimination but also other enterprises that do not engage in such practices. This is a natural effect related to pay scales. Pay scales in organizations typically have a range of 10-15% to the left and right, resulting in a total pay difference of about 30%. This means that a statistical twin may have different pay within the same organization, not due to unequal treatment, but due to differences in factors such as competence, engagement, tenure, or responsibility in a given position.

The EU directive does not mandate equal pay for employees in the same or similar positions, as it assumes that pay differences can be justified by objective criteria.

Soft criteria should be included not only in job descriptions but also reflected in processes such as employee evaluations, which directly impact the pay raise process. In many companies, factors influencing pay raise systems are only related to hard elements, such as performance, bypassing soft elements like attitude, engagement, and potential. The challenge will be to link these factors to support the company's development and reflect pay decisions.

Let's not forget the employer's obligation to provide employees with information about their individual pay levels and the average pay level (or median), broken down by gender, for categories of employees performing the same work or work of equal value. This means that employees will have the right to obtain information, respond to it, ask the employer about the criteria affecting their pay, and understand what determines their pay level.

We are therefore facing a change related to developing criteria and introducing transparency in the organization, as well as preparing managers for conversations with employees about pay, which has traditionally been a taboo topic in our culture. In my opinion, this will lead to a change in organizational culture in many companies. I wish everyone the best of luck!

Author:

Joanna Kolasa

hr consultancy manager / strategic relationship manager

Randstad Polska / Randstad RiseSmart