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A topic that has been taking up increasing space in HR discussions in recent months and often raises many questions is pay transparency. With the evolution of the European regulatory framework, addressing remuneration from the very first stages of recruitment will gradually become part of standard business practice. There is no need for concern, however. In this article, we explain in practical terms what will change and, just as importantly, what will remain the same.
What the directive will change for companies
With the European Pay Transparency Directive (EU) 2023/970, the European Union aims to provide stronger means of enforcing a principle that is already well established, yet sometimes difficult to demonstrate in practice: equal pay for equal work or work of equal value. The objective is to reduce unjustified pay gaps between women and men by increasing transparency, both during recruitment and throughout an employee’s career.
In Luxembourg, there is now a key date to remember, as the Directive must be transposed into national law by 7 June 2026 at the latest. However, there is no need to expect an immediate revolution. This regulatory development does not signal the end of salary negotiations, nor does it require employers to automatically publish every salary in every job advertisement.
For recruiters and HR professionals, the challenge is therefore not to endure this change, but to understand how it can become a tool for attracting talent and strengthening internal structures.
Beyond the sometimes alarmist messages circulating on the subject, the Directive does not require businesses to completely overhaul their operations overnight. Rather, it encourages them to formalise their practices more effectively, to be able to explain their remuneration decisions, and to make their processes more transparent and consistent. The real challenge will not necessarily be communicating more about pay, but rather structuring and clarifying what already exists.
Recruiters: key changes to be aware of from the outset
This is undoubtedly the most visible aspect of the Directive and the one that will affect all businesses, regardless of size. In the future, remuneration will need to be discussed earlier in the recruitment process so that candidates have clearer information before committing to an application process.
In practical terms, employers will be required to communicate the remuneration offered for a position before the job interview takes place. This may be a starting salary or a salary range determined according to objective criteria. The information may be included directly in the job advertisement or provided to the candidate before the first formal discussion.
One important point should nevertheless be highlighted. The Directive does not require employers to systematically display a salary in every job advertisement. However, organisations must be able to provide this information at the appropriate stage of the recruitment process.
Another significant change is that recruiters will no longer be permitted to ask candidates about their current or previous salary. Salary discussions will still be possible, but they will need to focus more on the value of the role, the skills being sought, and the candidate’s expectations, rather than on their salary history.
In this context, displaying a salary or salary range in a job advertisement can become a genuine advantage. Already today, around 27% of vacancies published on Moovijob.com include this information. Beyond compliance, doing so often saves time, improves the quality of applications, and strengthens the employer’s reputation for transparency.
Of course, some organisations still worry about internal comparisons or the potential impact on application volumes. However, these concerns also create an opportunity to reflect more broadly on the structure and consistency of remuneration policies.
HR professionals: what will change within your organisation
While the recruitment-related changes are the most visible, the most significant transformations will probably take place internally. Behind the concept of pay transparency, the Directive primarily encourages businesses to formalise their remuneration policies more effectively for employees.
In practice, employers will need to be able to explain the criteria used to determine salaries, pay levels, and progression rules within the organisation. These mechanisms must be based on objective and non-discriminatory criteria.
In other words, salary decisions will need to be understandable, explainable, and justifiable. Informal approaches based on "the way things have always been done" are likely to give way gradually to clearer frameworks.
For highly structured organisations, much of this work may already be in place. For many SMEs, however, the challenge will be more about establishing foundations than building a complex system. Defining job families, setting entry-level salary ranges, clarifying progression criteria, and formalising the role of performance in remuneration decisions can already provide an excellent starting point.
The Directive also introduces a new right for employees. They will be able to request information about their own level of pay, as well as average remuneration levels, broken down by gender, for the same work or work of equal value.
A common question raised by HR professionals, particularly in smaller organisations, is whether this means disclosing colleagues’ salaries. Not directly.
The aim is not to make individual salaries public, but to provide access to comparative data that can help identify potential unjustified pay disparities. Nevertheless, this will require particular care in smaller organisations, where anonymisation and the way comparison groups are defined will become important considerations.
Ultimately, the challenge will not necessarily be to disclose more information about salaries, but rather to explain more clearly how they are determined.
The obligations will not all apply at the same time
The good news for employers is that the new obligations will not come into force everywhere at the same time. While certain measures will apply to all businesses as soon as the Directive is transposed into Luxembourg law, others will depend on the size of the organisation.
For all businesses, regardless of size, the principles outlined above will apply from the date the Directive enters into force in Luxembourg, no later than 7 June 2026.
As for pay gap reporting obligations, the implementation timetable will be gradual:
- Businesses with 250 or more employees must publish their first data no later than 7 June 2027 and repeat the exercise annually thereafter.
- Businesses with between 150 and 249 employees must also publish their first data no later than 7 June 2027, with reporting required every three years.
- For businesses with between 100 and 149 employees, the obligation will begin later, from 7 June 2031 onwards, following the same three-year reporting cycle.
- Finally, businesses with fewer than 100 employees are not subject to the reporting obligations set out in the Directive. However, they will still need to comply with the new recruitment-related requirements and pay transparency principles.
In other words, although businesses will not all follow the same timetable, all organisations would benefit from reviewing their practices now.
More than just an additional regulatory requirement, pay transparency represents an evolution in recruitment and HR management practices. The question is no longer whether organisations will discuss remuneration, but rather how they choose to do so.
For recruiters, this means clearer processes and more transparent discussions. For HR professionals, it requires remuneration policies that are better structured and easier to explain. And for organisations that take proactive steps, it can become a genuine competitive advantage in a labour market where candidates are increasingly looking for visibility, consistency, and trust from the very first interaction.
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