The EU Pay Transparency Directive came into force in June 2023, and member states have until 7 June 2026 to transpose it into national law. Its purpose is to make pay practices more transparent, strengthen equal pay rights, and make it easier for employees to challenge discrimination.

In practical terms, employers operating in the EU will need to give candidates pay information before the interview stage, stop asking about salary history, and let employees see pay levels for comparable work. Larger employers will also have to report on gender pay gaps and justify any differences. The burden of proof in equal pay disputes shifts to the employer, so businesses will need evidence-based frameworks to defend how pay decisions are made.

One problem cuts across all of this: almost no member state has seriously considered what the Directive means for the EOR and staffing industry, or for agency workers. The legislation assumes a conventional employer/employee relationship, and national transposition has largely followed suit, leaving multi-party structures without clear guidance.

IMPLEMENTATION IS UNEVEN

The June 2026 deadline is close, but progress across the EU varies. Lithuania, Slovakia, Malta and Poland are among the jurisdictions furthest along. Others are moving more cautiously: Germany is considering staged application from 2027, the Netherlands has discussed delaying until 1 January 2027, Estonia has raised concerns about rushed timelines, and Sweden has signalled it may seek further discussion at EU level.

France, Spain, Belgium and some Nordic jurisdictions already had pay reporting or equal pay frameworks before the Directive, but existing national rules do not necessarily mean full compliance with the new requirements.

For employers operating across multiple jurisdictions, this produces legal uncertainty rather than legal delay. A single EU-wide policy may not be sufficient, because local implementation is diverging in both timing and substance. The European Commission is expected to begin infringement proceedings against countries that miss the deadline, and some states (Belgium being one example) are likely to introduce obligations that go beyond the Directive itself. Businesses should prepare against the Directive now rather than waiting for local legislation to settle.

WHY STAFFING IS MORE COMPLICATED

For staffing and workforce solutions providers, the implications are harder to manage. EORs, staffing agencies, MSPs and RPO providers sit in multi-party structures where responsibility for pay decisions and legal employment status don't always align.

Under the Directive, obligations generally fall on the legal employer. In an EOR model, that means the EOR carries the pay transparency obligations even where the end client influences rates and budgets. An EOR employing workers across multiple client projects may hit reporting thresholds far earlier than expected, and differences in pay between comparable workers engaged by different clients could create equal pay exposure if those differences can't be objectively justified.

MSPs and staffing agencies will need access to accurate comparator pay data from clients and suppliers. RPO providers will need controls to ensure candidates receive pay information at the right stage and that recruiter behaviour matches the new rules.

WHAT TO DO NOW

Recruitment processes are the most visible starting point. Job adverts and candidate communications need to include pay information before the interview stage, recruiters need to be trained not to ask about salary history, and candidate messaging should be standardised across jurisdictions.

Pay governance is the more demanding piece of work. Businesses need a defensible job evaluation framework based on objective criteria, since job titles and historic pay practices won't be enough. Roles should be classified by country, job family, level, skills, responsibilities, experience and working conditions, so the business can explain why different roles, clients and projects pay differently while managing equal pay risk.

Contracts and supply chain risk are the third area. EOR, MSP and agency agreements should allocate responsibility for pay-related decisions, require clients to support compliance obligations, and address liability where discriminatory pay structures originate from client-side decisions. A responsibility map is one way to manage this.

Businesses with 150 or more workers should already be preparing for the first reporting cycles, which are expected from 2027 onwards, with larger employers reporting more frequently. Employers with 100-149 workers will follow later under the Directive's phased timetable. Reliable reporting needs accurate workforce and pay data from well before publication deadlines, which is why it's worth getting organised now.

Pay-setting and pay-progression criteria, along with a process for handling worker pay information requests, also need attention.

WHAT TO WATCH OVER THE NEXT 12 - 24 MONTHS

Divergence between member states is the first thing to track. Some jurisdictions will impose stricter standards than the Directive requires, which adds operational complexity for businesses across multiple EU markets.

Regulatory guidance is the second. National equality bodies and labour authorities will shape how concepts like "work of equal value" are interpreted, what pay differentials are acceptable, and how pay transparency applies to contingent workforce structures.

The first wave of litigation is the third. The Directive lowers procedural barriers for employees and reverses the burden of proof, so businesses should expect more scrutiny from employees, worker representatives, regulators and claimant firms. Early cases in jurisdictions with more developed frameworks, such as France, Germany, Spain, Belgium and the early full-transposition states, will shape how the staffing sector is treated across the wider EU market.