LEGAL ALERT. PAY TRANSPARENCY: CURRENT STATUS AND KEY DEVELOPMENTS UNDER DIRECTIVE (EU) 2023/970

Equal pay for women and men is a fundamental principle of both European Union law and the Spanish legal system.

In this context, Directive (EU) 2023/970 represents a significant step forward in promoting pay transparency and strengthening the mechanisms designed to ensure the effective application of the principle of equal pay for equal work, or work of equal value.

Although Spain already has an advanced regulatory framework on pay equality—comprising of, among other provisions, Article 28 of the Workers’ Statute, Organic Law 3/2007, and Royal Decree 902/2020—the Directive introduces new measures that will likely require further adaptation of national legislation.

The deadline for transposition of the Directive expired on 7 June 2026. However, as of the date of publication of this article, no specific legislation has yet been enacted in Spain to formally incorporate its provisions into domestic law.

Obligations Currently in Force in Spain

Spanish companies are already subject to a number of obligations relating to pay equality, including:

• The obligation to guarantee equal pay for work of equal value.
• The preparation and maintenance of a pay register.
• The implementation of pay audits where legally required.
• The negotiation and implementation of equality plans when mandatory.
• The use of objective criteria to justify any pay differentials.

Accordingly, the future adaptation of Spanish legislation to the Directive does not begin from a position of regulatory absence, but rather from an existing legal framework that already incorporates important pay transparency and monitoring mechanisms.

Key Developments Introduced by the Directive

The Directive places pay transparency at the centre of efforts to prevent and address potential pay discrimination.

Among its principal measures are:

• The right of job applicants to receive information regarding the initial salary or salary range applicable to the position offered.
• The prohibition of requesting information about candidates’ salary history during recruitment processes.
• The expansion of employees’ rights to obtain information regarding the criteria used to determine pay, career progression and salary advancement.
• The strengthening of enforcement mechanisms and legal remedies in cases of pay discrimination.
• The introduction of new gender pay gap reporting obligations for companies above certain workforce thresholds.

In addition, the Directive provides for joint pay assessments where significant pay disparities between women and men are identified and cannot be justified by objective and gender-neutral criteria.

Gender Pay Gap Reporting Obligation

The Directive establishes a phased reporting system on the pay gap, based on company size:

• Companies with 250 or more employees: annual reporting obligation from June 2027.
• Companies with between 150 and 249 employees: reporting obligation every three years, beginning in June 2027.
• Companies with between 100 and 149 employees: reporting obligation every three years from June 2031.
• Companies with fewer than 100 employees: no periodic reporting obligation, unless future national legislation provides otherwise.

Recommendations for Companies

Although the transposition of the Directive into Spanish law remains pending, companies are advised to begin assessing the extent to which their remuneration and human resources policies are aligned with the forthcoming requirements.

In particular, organisations should consider:

• Reviewing salary structures and the criteria used for allocating pay supplements and benefits.
• Ensuring that job evaluation systems are based on objective and consistent criteria.
• Analysing promotion procedures and salary review processes.
• Keeping pay records and, where applicable, pay audits required under current legislation, up to date.
• Reviewing recruitment and hiring processes from a transparency, objectivity and non-discrimination perspective.

Conclusion

Directive (EU) 2023/970 reinforces the trend towards greater pay transparency and more rigorous scrutiny of potential pay disparities between women and men.

While many obligations relating to pay equality already form part of the Spanish legal framework, the future transposition of the Directive is expected to increase transparency and reporting requirements for employers.

In this context, companies are encouraged to use this transitional period to review their remuneration systems, recruitment and promotion procedures, and internal monitoring mechanisms, thereby facilitating compliance with the future regulatory framework and reducing potential employment and regulatory risks.

Employment Law Department
Giménez Torres Abogados