Salary Transparency is No Longer Optional: How New EU Rules Will Reshape the French Workplace
A staggering 12% – that’s the average gender pay gap across Europe in 2020, according to Eurostat. Now, a sweeping new directive adopted by the European Council is poised to dramatically alter how companies operate, particularly in France, where implementation is mandated by June 2026. This isn’t just about compliance; it’s a fundamental shift in power dynamics, promising greater salary transparency and a more equitable future for workers.
The Coming Wave of Transparency: What Employers Need to Know
The core of the directive centers on dismantling practices that perpetuate pay inequality. French employers will soon be legally obligated to include salary ranges in job postings, a move designed to level the playing field from the outset. The days of asking candidates to disclose their previous salaries – a tactic often used to anchor offers lower – are numbered. This proactive approach aims to prevent past disparities from influencing future earnings.
But the changes don’t stop at recruitment. Employees will gain the right to request information on average salaries for comparable roles, broken down by gender. Crucially, they’ll also have access to the criteria used to justify salary increases, fostering accountability and challenging potentially biased decisions. This access to information is a game-changer, empowering employees to advocate for fair compensation.
A Tiered Approach to Reporting Pay Gaps
The directive adopts a tiered approach based on company size. Larger organizations (250+ employees) will be required to publish annual reports detailing gender pay gaps. Medium-sized businesses (50-249 employees) will need to report every three years. While companies with fewer than 50 employees are currently exempt, the pressure to address pay equity will likely extend to them as well. If a pay gap exceeding 5% is identified and cannot be justified by objective criteria, companies will be compelled to take corrective action.
The stakes are high. In cases of proven gender discrimination, employees could receive full compensation for salary and bonus arrears. Perhaps most significantly, the burden of proof shifts to the employer. Instead of the employee having to demonstrate discrimination, the employer must prove they are compliant with the directive. The European Council emphasizes that any sanctions for violations will be “effective, proportionate and dissuasive,” including substantial fines.
France is Behind the Curve: A Wake-Up Call for Businesses
Despite the looming deadline, a recent study by the Association for the Employment of Executives (Apec) reveals a concerning lack of preparedness. Only 25% of French companies surveyed have begun preparing for the new regulations. Currently, just 46% include salary information in job ads, and a significant 60% still ask candidates about their salary history. This suggests a substantial cultural shift is needed, alongside practical adjustments to HR processes.
The Apec study also highlights a potential positive outcome: the directive could lead to salary increases for female executives. In 2025, they earned 6.8% less than their male counterparts in similar roles. Increased transparency and accountability are expected to accelerate the closing of this gap.
Beyond Compliance: The Rise of Pay Equity Software
Companies are already beginning to explore tools to help them navigate these changes. We’re seeing a surge in demand for pay equity software that analyzes salary data, identifies potential disparities, and provides recommendations for remediation. These tools aren’t just about compliance; they’re about building a more diverse and inclusive workplace, which has been shown to drive innovation and improve financial performance. Catalyst research consistently demonstrates the benefits of inclusive leadership and diverse teams.
The Future of Work: Transparency as the New Normal
The EU directive is not an isolated event. It’s part of a broader global trend towards greater pay transparency. Several US states and cities have already enacted similar laws, and the pressure for federal legislation is growing. This shift reflects a growing societal expectation that pay should be fair, equitable, and based on merit, not gender or other protected characteristics.
Looking ahead, we can expect to see increased scrutiny of pay practices, greater employee activism, and a more competitive talent market where transparency is a key differentiator. Companies that proactively embrace these changes will be best positioned to attract and retain top talent, build a strong employer brand, and thrive in the future of work. What steps is your organization taking to prepare for this new era of salary transparency? Share your thoughts in the comments below!
