The EU Pay Transparency Directive applies to employers in both the public and private sectors. It also applies to workers who have an employment contract or employment relationship recognised under the law, collective agreements or practice of the relevant Member State, taking account of Court of Justice case-law. Job applicants are covered for the pre-employment transparency rules in Article 5. Employer size matters for certain obligations, especially Article 9 gender pay gap reporting, but it does not create a general exemption from the Directive for smaller employers.
Jurisdiction: European Union
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Public and Private Sector Employers Are Both Covered
Article 2 of Directive (EU) 2023/970 states that the Directive applies to employers in the public and private sectors. That starting point is broad. A company should not assume that the rules apply only to large listed businesses, nor should a public authority assume that the rules are designed only for private employers. The correct first question is whether the organisation is an employer within the relevant Member State. Once that is established, the organisation should determine which transparency, information, equal-pay, reporting and enforcement provisions apply to its workforce and recruitment activity.
Worker Coverage Depends on the Employment Relationship
The Directive applies to workers who have an employment contract or employment relationship as defined by the law, collective agreements and practice in force in the relevant Member State, with account taken of Court of Justice case-law. This means that the label used by an organisation is not always decisive. Employers should identify the categories of people treated as workers under the applicable national framework rather than applying an internal HR label mechanically. The Directive's recitals specifically discuss groups such as part-time workers, fixed-term workers, temporary-agency workers and workers in management positions where the required employment relationship exists.
Job Applicants Have Their Own Scope Rule
Article 2 also creates a specific rule for applicants for employment. For the purposes of Article 5, the Directive applies to job applicants before they become workers. That matters because some of the most visible pay-transparency requirements operate during recruitment. Employers need to provide information about the initial pay level or range in the manner required by the applicable implementation and must not ask applicants about their pay history. Recruitment teams therefore belong inside the scope assessment even though applicants have not yet entered an employment relationship with the organisation.
Employer Size Does Not Decide Whether the Directive Exists
The Directive contains important employer-size thresholds, but those thresholds should not be confused with the Directive's overall scope. The best-known thresholds appear in Article 9 and determine when employers enter the recurring gender pay gap reporting timetable. Employers with at least 100 workers are brought into the Directive-level reporting framework on a staged basis. That does not mean an employer with fewer than 100 workers can ignore recruitment transparency, worker information rights, objective pay structures, equal-pay requirements or enforcement provisions that apply independently of Article 9 reporting.
National Implementation Can Change the Practical Answer
Because Directive (EU) 2023/970 is implemented through national law, an employer should not end its analysis with the EU text alone. Member States establish the procedures, competent authorities, penalties and practical mechanisms used within their legal systems. They can also adopt or maintain provisions that are more favourable to workers than the Directive's minimum requirements. A group operating in several Member States may therefore have one EU-level scope framework but different operational instructions by country. The legal entity, workforce location, recruitment location and applicable national law should all be recorded in the scope assessment.
A Practical Employer Scope Assessment
A practical assessment starts by listing each employing entity and the Member States in which it employs or recruits people. The employer can then identify the worker groups recognised under the applicable national framework, the applicant-facing recruitment processes, the current workforce size and the obligations that depend on that size. The final output should distinguish general obligations from reporting obligations. This avoids a common mistake in which a company sees the 100-worker reporting threshold and incorrectly treats it as the threshold for the entire Directive. The scope record should be updated when workforce size, legal entities or national implementation rules change.
Frequently Asked Questions
Does the Directive apply to both public and private employers?
Yes. Article 2 states that the Directive applies to employers in both the public and private sectors.
Does an employer need 100 workers before any pay transparency rule applies?
No. The 100-worker threshold is especially important for Article 9 reporting. Other transparency and equal-pay obligations can apply independently of that reporting threshold.
Are job applicants covered?
Yes, for the purposes of Article 5. The Directive applies to applicants for employment in relation to its pre-employment transparency 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.