Two-fifths of companies are preparing for EU pay transparency rules, according to a poll by WTW.
The new EU Pay Transparency Directive came into force last year and requires companies to meet a number of reporting requirements by June 2026.
The poll of 330 companies across 27 different countries found that 44% had started planning for the new rules, but 21% had not made any preparations.
Just under a fifth (17%) had taken steps to engage stakeholders, 13% had run analytics, and 5% had taken “broader management actions”.
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More than a quarter (26%) said their greatest challenge in preparing for the legislation is meeting the reporting requirements. The same proportion said that developing an action plan in line with the EU requirements was their main challenge.
Eighteen per cent said they faced difficulty in identifying gaps in current gender pay or rewards management approaches.
Although the UK is no longer an EU member state, it could impact employers who employ people in the EU.
It will also likely raise expectations of pay transparency in the UK, potentially placing pressure on the government to legislate to match EU standards.
Eva Jesmiatka, pay and career equity lead at WTW, said: “It’s important that employers put steps into motion to address any pay transparency challenges as soon as possible.
“Conducting a readiness check which carries out initial analytics and an evaluation of current pay structures, policies and practices can be used to build a roadmap and an approach to communications in line with the desired employee experience. This will help companies be ready ahead of any teething challenges.”
WTW explained that the new rules will give employees “extensive new rights” to information about their own pay and that of their peers. The company advised the following actions in terms of preparation:
- Ensuring job levels and architecture are “robust” to allow reliable identification of which employees do the same work or work of equal value
- Reviewing pay policies on recruitment, promotion and annual reviews and that any reasons for pay differences are for objective reasons
- Making relevant data available and ensuring it is analysed on a regular basis to understand the current picture and progress, and
- Educating managers and employees on pay to provide a firm base for future transparency.
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