The EU wants to close the gender pay gap
The EU directive on pay transparency will soon oblige medium and large companies to report in detail on the pay of their female and male employees. The European Commission's decision will mean that employees who are disadvantaged can take legal action against the data, EY warns. The consultancy's colleagues are urging companies to take steps to close the pay gap by clarifying their organisation as soon as possible.
Men in the EU earn on average 13% more than women. The European Commission's (EC) directive aims to change this, with widespread reporting obligations for companies from 2027. As part of this, companies will also have to report on the proportion of female and male employees who receive so-called additional pay elements, such as bonuses, or the gender ratio within certain salary bands. Where there is a gender pay gap of 5 per cent or more, employers should work with workers' representatives or works councils to carry out a more in-depth analysis and develop a corrective action plan to address the situation.
Member states, including Hungary, have until 7 June 2026 to transpose the directive into national law. It requires employers with 250 or more employees to report the required information every year from 7 June 2027, while those with 150-249 employees must provide this information every three years from 7 June 2027. Businesses with 100-149 employees are also required to report every three years, but only from 7 June 2031.
"Most firms are likely to know whether there is a gender pay gap problem. But few are currently making the effort to understand what causes the inequality. The directive created by the EC will change this. However, responsible decision-makers will not wait until the last minute, but will carry out an audit in their company as soon as possible - even with the help of a consultancy - and take the right steps to close the gap," said Veronika Oláh, Senior Partner in EY's Workforce and Human Resources Consulting practice.