EU Directive without Implementing Legislation

The EU Pay Transparency Directive (Directive (EU) 2023/970) contains provisions designed to strengthen the principle of „equal pay for equal work or work of equal value“ between men and women. More transparency in pay and easier enforcement of claims are intended to reduce existing gender pay gaps.

Although the directive should have been transposed into national law by 07.06.2026, implementation in Austria has not yet taken place. As the directive is primarily addressed to the Member States, it does not generally apply directly to companies and their employees. Although a draft law is currently being discussed at the political level, the specific form of the provisions remains open. Key questions (delimitation of comparable groups or practical design of the provision of information) are still unresolved.

Despite this delay, it is already clear that companies will face additional transparency, documentation, and reporting obligations in the future. Against this backdrop, it is advisable to, to proactively take the necessary preparatory steps with regard to the upcoming requirements. Utilise our practical tips and recommendations for businesses and HR managers:

Adapting recruitment processes to pay transparency

(regardless of the number of employees in the company)

Recruitment processReview existing processes and avoid unnecessary additional effort, for example, by stating the salary range in the job advertisement, which can save you a separate information request before the interview.
Job advertsFrom now on, employers will be obliged to state the monetary salary range („salary band“) for the respective position, either in the job advertisement or at the latest before the interview. Merely stating the collective agreement minimum wage, coupled with a reference to willingness to pay above this, will no longer suffice. The salary range (from EUR ... to EUR ...) will be based on the actual salaries paid within the respective peer group.
Interview guides and application formsCheck these for impermissible questions. Questions such as „What is your current salary?“ or „What was your last salary or wage?“ will be impermissible in the future. A sensible alternative is, for example, the question: „What are your salary or wage expectations?“.
Job interviewsFull documentation and the participation of a second internal person in job interviews increase legal certainty. This makes it significantly easier for the company to protect itself against potentially inaccurate statements retrospectively.

Adapting contract design to pay transparency

(regardless of the number of PGs in the company)

Review of service agreements (including any addendums and ancillary agreements):

In future, confidentiality and non-disclosure clauses relating to one's own remuneration will be inadmissible. You should therefore no longer include such provisions in newly concluded employment contracts. Whether existing employment contracts must also be amended accordingly (= removal of corresponding clauses from existing contracts) is currently still open.
If collective agreement excess payments or additional remuneration components are granted in the employment contract, e.g. a bonus or a performance-related bonus, carefully check the criteria on which they are based and whether they are objectively verifiable and designed in a non-discriminatory manner.

Prepare information obligations organisationally

(regardless of the number of PGs in the company)

The EU directive stipulates the disclosure of annual gross salaries for employee requests regarding pay transparency. However, the obligation to provide information – concerning both the applicant's own salary and the average salaries of male and female persons in the same comparison group – only becomes legally effective through corresponding national legislation. Nevertheless, the recommendation is to make provisions for future requests and to establish clear procedures and responsibilities, in particular:

Creating sample responses for employee information requests
Determining who provides the necessary information, based on what data and information.
Determine which individuals should be involved in processing information requests to justify any differences in remuneration based on factual and objectively comprehensible criteria, e.g., the functionally responsible manager.
Check and, if necessary, clean up the stored master data
Definition of the comparison groups relevant for determining the average remuneration

The company's future obligation to inform employees annually about their right to pay information can be implemented, for example, by means of a notice in an internal newsletter, on the intranet, or in the respective communication system.

Remuneration Reports: Preparing Structures and Data Basis

(about 100 employees in the company)

The current income reports, which are currently mandatory from 150 employees, will in future be replaced by more comprehensive remuneration reports, which are already planned from 100 employees. The following timeline applies:
Companies that on average

250 and over Prepare an annual remuneration report from the 2026 reporting year.
150 to 249 AN prepare a remuneration report every three years from reporting year 2026
100 to 149 AN prepare a remuneration report every three years from the reporting year 2030

SubmissionCompanies must the the respective remuneration report by 07.06. at the latest of the calendar year following the reporting year and submit it to the Federal Accounting Agency.

ContentsKey figures on the gender pay gap, variable remuneration components, the distribution of women and men across pay quartiles, and pay ratios within comparable employee groups.

Establishing a transparent remuneration structure (salary evaluation system) within the company

Companies will need an internal reporting system that structures and analyses remuneration data. Furthermore, comparison groups, which must already be formed to fulfil the disclosure requirement, need to be clearly defined in order to correctly determine the gender pay gap. Payroll, HR, Controlling, and IT will have to collaboratively develop the right solution in order to ensure appropriate data quality. It is therefore advisable to look for a suitable software solution in good time.

A starting point is to use collective agreement employment groups as a basis for comparability. However, the requirements for an internal compensation system go much further. Individuals who do not belong to the same collective agreement employment group can also be comparable. Furthermore, collective agreements do not always adequately reflect the criteria of the EU directive – competencies, responsibility, workload, and working conditions. Additionally, for remuneration above collective agreement levels, there is often a lack of an objectively comprehensible pay assessment system.
One possible approach to creating an internal job architecture is to define „job families“ (e.g., sales, administration, finance, or management), within which graded levels can be provided according to experience, qualifications, etc.
Salary and wage decisions – both for new hires and for subsequent increases – as well as promotions should be appropriately documented along with the basis for the decisions.

The greatest uncertainties currently exist particularly in relation to internal company remuneration structures, for example regarding the question of how to define „equal“ or „equivalent“ work in detail. Further Austrian legislation therefore remains to be seen in this area.

Leadership, HR and payroll staff communication and training

Developing an internal communications strategy on pay transparency
Information for managers as well as HR and payroll professionals on pay transparency rules, e.g. on employees' new rights to information, and raising awareness of associated risks.
Potentially creating a company-specific FAQ collection for employees