Employers should document pay differences in a way that connects the actual compensation outcome to a specific objective, gender-neutral criterion. A useful record identifies the comparable worker category, the pay components being compared, the amount or nature of the difference, the reason for the difference, the evidence supporting that reason, who approved the decision and when it should be reviewed. Directive (EU) 2023/970 does not prescribe one mandatory template, but Articles 9 and 10 make clear that employers may need to explain gender pay differences and show whether they are justified by objective, gender-neutral criteria.
Jurisdiction: European Union
Start With the Comparison That Produced the Difference
A pay-difference record should first identify which workers or category of workers are being compared and why the work is considered equal or of equal value. That provides the context needed to understand whether the difference is material. Employers should record the relevant job-evaluation outcome, category definition or other comparison basis rather than documenting the pay figure in isolation.
Record the Exact Pay Components Being Compared
Equal-pay analysis extends beyond basic salary. Where relevant, the documentation should distinguish base pay, variable pay, allowances, benefits or other components. A difference in total compensation can arise from one component even where basic salary is identical. Breaking the outcome into components helps the employer identify the real source of the difference and avoid vague explanations.
Connect the Difference to a Specific Objective Reason
The record should identify the actual reason for the difference, not a broad category such as 'market' or 'performance' without supporting detail. If experience is the reason, note the relevant experience and why it matters. If performance is the reason, retain the assessment evidence. If location is the reason, reference the applicable geographic pay framework. The goal is to create a clear causal link between the criterion and the pay outcome.
Preserve the Evidence and Methodology
Employers should retain enough evidence to reproduce the decision later. That may include job descriptions, evaluation scores, salary-band rules, performance records, market data, location policies or approval records. The Directive does not require one universal evidence pack, but Article 10 shows why substantiated explanations matter. A conclusion that cannot be reproduced from retained evidence is harder to defend during a pay-information request, joint pay assessment or dispute.
Record Ownership, Timing and Review Triggers
Documentation should identify who approved the difference, when it took effect and when the justification should be reviewed. A once-valid factor may stop being relevant after promotion, restructuring, relocation or a change in responsibilities. Review triggers help prevent a historic difference from continuing after the original rationale has disappeared.
Do Not Invent an EU-Wide Retention Period
Directive (EU) 2023/970 does not set one universal number of years for retaining every pay-difference record. Employers should determine retention using applicable national employment law, limitation periods, reporting and dispute requirements, and data-protection principles including storage limitation. The practical aim is to retain evidence for as long as it has a legitimate legal and compliance purpose without keeping personal data indefinitely by default.
Frequently Asked Questions
Does the Directive require a specific pay-difference form?
No. It requires objective, gender-neutral justification in relevant contexts, but it does not prescribe one universal employer template.
What should be recorded for a pay difference?
At minimum, the comparison basis, pay components, difference, objective reason, evidence, decision owner, effective date and review trigger should be considered.
Should employers keep market data used in a pay decision?
Yes where market data is relied on as part of the justification, because retaining the source and methodology helps demonstrate how the decision was reached.
How long should records be kept?
The Directive does not set one universal retention period. Employers should check national law, dispute and limitation rules, reporting duties and data-protection requirements.
Related Guides
Official Sources
Requirements and practices differ by jurisdiction and organisation. Check current local law, official guidance and professional advice for a specific situation.