Insights
HR & PAYROLL
Implementation of the Pay Transparency Directive
The aim of the EU Pay Transparency Directive is to make salary differences more visible and to make fair pay more verifiable. The concrete implementation in Austria, which should have been completed by 07 June 2026, is however not yet finished.
In addition to the obligation to publish gender‑neutral job advertisements, job applicants receive the right to information about the intended starting salary for the relevant position as well as about the applicable provisions of the relevant collective agreement. Employers may not ask applicants about their pay development in current or previous employment relationships. Employees who are actively employed will in future have the right to learn the average pay of their comparison group – broken down by gender.
Equal pay for equal or work of equal value
Based on objective, gender‑neutral and (where available) agreed criteria with employee representatives, employees should be able to assess whether they are in a comparable situation with respect to the value of their work. To this end, employers must introduce gender‑neutral job‑evaluation and classification systems or define categories of employees who perform equal or work of equal value, thereby ensuring a transparent remuneration system.
Quantification of the relevant remuneration
For the purposes of pay transparency and comparability, the relevant remuneration must be defined and quantified accordingly. In labour law there is no uniform definition of remuneration; rather, any type of benefit provided by the employer to the employee as consideration for the provision of their labour is understood as remuneration. While the numerical definition of, for example, the annual base salary, allowances, (variable) cash compensation or benefits will generally be feasible, the valuation of share options, pension commitments, company cars, health insurance, private medical services or life insurance may in some cases cause difficulties.
Legal consequences for breaches of the Pay Transparency Directive
Due to the lack of statutory implementation of the Directive, only the instruments provided for in the Directive in case of legal infringements, such as retroactive damages claims for three years or appropriate sanctions and fines, are currently known. National legislation remains to be awaited.
Reporting obligations for employers
Depending on the number of employees, employers – starting from 2027 for companies with 250 employees – must periodically prepare and make available reports on gender‑specific pay gaps. Under the Directive, companies with fewer than 100 employees are not subject to reporting obligations, but whether Austria will nevertheless impose reporting duties on such enterprises remains to be seen.
Equal pay for equal or work of equal value
Based on objective, gender‑neutral and (where available) agreed criteria with employee representatives, employees should be able to assess whether they are in a comparable situation with respect to the value of their work. To this end, employers must introduce gender‑neutral job‑evaluation and classification systems or define categories of employees who perform equal or work of equal value, thereby ensuring a transparent remuneration system.
Quantification of the relevant remuneration
For the purposes of pay transparency and comparability, the relevant remuneration must be defined and quantified accordingly. In labour law there is no uniform definition of remuneration; rather, any type of benefit provided by the employer to the employee as consideration for the provision of their labour is understood as remuneration. While the numerical definition of, for example, the annual base salary, allowances, (variable) cash compensation or benefits will generally be feasible, the valuation of share options, pension commitments, company cars, health insurance, private medical services or life insurance may in some cases cause difficulties.
Legal consequences for breaches of the Pay Transparency Directive
Due to the lack of statutory implementation of the Directive, only the instruments provided for in the Directive in case of legal infringements, such as retroactive damages claims for three years or appropriate sanctions and fines, are currently known. National legislation remains to be awaited.
Reporting obligations for employers
Depending on the number of employees, employers – starting from 2027 for companies with 250 employees – must periodically prepare and make available reports on gender‑specific pay gaps. Under the Directive, companies with fewer than 100 employees are not subject to reporting obligations, but whether Austria will nevertheless impose reporting duties on such enterprises remains to be seen.