With the 7 June 2026 deadline for implementation of the EU Pay Transparency Directive deadline now passed, only 4 countries met the deadline: Italy, Lithuania, Malta and Slovakia, with Greece finalising its legislation shortly afterwards with a 1 November 2026 effective date and Estonia partially implementing some aspects of the Directive in July.

Since our last briefing in early July 2026, Spain and Portugal have both published draft legislation. 

UPDATES ON DRAFT LEGISLATION

Spain

In July a draft of Spain's transposition was "leaked" from the Spanish Ministry. An official draft has now been published in August.

This is not yet the final text, so the text may change as it passes through the parliamentary process. It should be noted that, as with the previous unofficial draft, certain issues such as pay transparency in recruitment are not addressed in the draft. As the draft itself states, this constitutes a partial transposition.

The key highlights of the Spanish draft are as follows:

1. Active pay transparency obligations

Employers will be required to keep pay information permanently available to employees, rather than simply making it available on request. The duty on companies to "make available" pay criteria is transformed into an active obligation to "provide information" in a comprehensible and easily accessible manner, and to keep that information up to date — including whenever pay criteria, pay levels or pay progression criteria change.

2. Extended pay record-keeping

The existing requirement in Spain for employers to maintain a pay register is extended to include both annual and hourly pay calculations, and the register must also be drawn up in accordance with job classification.

3. Strengthened pay audit process

The existing Spanish pay audit mechanism, a statutory tool for assessing pay and correcting unjustified inequalities, has been reformulated and strengthened to align it with the Directive. It now comprises two stages: a diagnostic phase (covering job evaluation and identification and analysis of pay differences, including new factors such as pay levels) and an action plan phase. The deadline for employers to rectify identified pay inequalities is extended from two to six months (in line with the Directive), and the action plan must incorporate a system for evaluating the effectiveness of previous measures.

Pay audit reports will now be submitted to a newly established Commission for Monitoring Pay Transparency, rather than the body previously responsible for equality matters.

When identifying and analysing pay differences, employers must take into account, as a minimum, three years of data covering: the proportion of employees broken down by sex across each category of worker, professional category or pay band; the information contained in the pay register and any differences therein; and the reasons, if any, for such differences, based on objective and gender-neutral criteria. The completed audit must be made available to employees and their legal representatives, and the employer must notify the Commission for Monitoring Pay Transparency upon completion.

Existing pay audits that have been incorporated into equality plans already in force will remain valid until the end of their current validity period or next review date, at which point they must be updated to comply with the new requirements.

4. Gender pay gap reporting — lower threshold than the Directive

Companies with 50 or more employees that maintain a pay register will be required to provide detailed gender pay gap information to the Commission for Monitoring Pay Transparency. This obligation will apply annually for companies with 250 or more employees and every three years for companies with between 50 and 249 employees — a lower threshold than the Directive itself requires.

Phased deadlines apply: 

• companies with 150 or more employees must comply by 7 June 2027, and 
• companies with between 50 and 149 employees must comply by 7 June 2031.

5. New oversight body

A new Commission for Monitoring Pay Transparency is established — a tripartite body comprising the Government, trade unions and employers' organisations, chaired by the Secretary of State for Labour. Its responsibilities include raising awareness, analysing pay gaps, compiling and publishing data, receiving pay audit reports, assisting employees in exercising their right to information, and fostering institutional cooperation.

6. Employees' right to request pay information

Employees may request pay information once a year, or more frequently where changes to their pay or role justify it. The draft also includes data protection safeguards in relation to the exercise of this right.

7. No prohibition on pay secrecy clauses

Notably, the current draft makes no reference to a prohibition on contractual pay secrecy clauses.

8. Data protection obligations

A new provision requires both employers and the Commission to implement appropriate technical and organisational measures for the processing of data arising from pay transparency obligations, including data minimisation and controls on access to information

Portugal

Draft legislation was published in early August in Portugal. In many respects, the proposal mirrors the wording of the Directive. However, the draft introduces certain features that are particularly relevant in the Portuguese context. We highlight below the following key measures:

• Obligation to adopt a transparent pay policy: This must be agreed with employees’ representatives, where such representatives exist, and based on objective and gender-neutral criteria, namely skills, responsibility and working conditions and, where appropriate, any other factors relevant to the position or role.
• Transparency on hire: job candidates are entitled to information about the initial remuneration or the applicable pay range and the provisions of the collective bargaining agreement applicable to the position concerned, prior to the conclusion of the employment contract (in line with the Directive).
• Right to information: Expressly includes temporary agency workers assigned to the company, so the end user client will need to provide this information to agency workers assigned to it, on request.
• Pay and Pay progression criteria: Companies with fewer than 50 employees are exempt from the obligation to provide employees with pay and pay progression criteria.
• Lower threshold for gender pay gap reporting: There is an obligation for companies with 50 or more employees to report detailed information on gender pay gaps, including base salary, variable remuneration components and the distribution of employees across pay bands. This obligation must be complied with every three years by companies with 50 to 249 employees and annually by companies with 250 or more employees. Again this is a lower threshold than the Directive.
• Shorter period and defined process for remediating unexplained gender pay gaps: A mechanism for the justification and correction of pay differences has been introduced, with the intervention of the Portuguese Labour Authority (ACT), whenever pay disparities not justified by objective criteria are identified in the gender pay gap reporting. The proposal provides for a 90-day period for employers to justify or correct the identified pay difference and a 45-day period for ACT’s assessment, which is shorter than the Directive. Pay differences that are not justified by the employer will be presumed discriminatory.
• Protection against retaliation: any dismissal or disciplinary sanction imposed within three years of the submission of a complaint relating to the exercise of rights concerning pay equality is presumed to be abusive.
• Expansion of the sanctions regime, which, in addition to administrative fines, may include ancillary sanctions such as:

1. Withdrawal of public benefits;
2. Revocation of tax and financial incentives;
3. Exclusion from public procurement procedures;
4. Mandatory training on pay transparency.

• Data disclosure: the entity within the Ministry responsible for labour matters and competent to process the relevant data (which we believe will be the Office for Strategy and Planning – GEP) will publish, on its website, by the end of the first half of each calendar year, information regarding pay gaps between men and women at national, regional, sectoral and employer-specific level, relating to the previous year.

Naturally, as this remains a draft legislative proposal subject to public consultation, the final text may still be amended. Nevertheless, the proposal appears to be a strong indication of how the Portuguese legislator intends to implement the Directive.

What This Means for You

These developments underscore that a uniform, "one size fits all" approach to the EU Pay Transparency Directive compliance across European operations may not be practicable. Country-specific nuances, particularly around definitions of pay, timelines, and reporting mechanics, will require careful consideration.

Your Contacts

At Deloitte, we understand that navigating the demands and complexities of pay equity and transparency can be daunting. Our proposition is designed to help you overcome this challenge and achieve your goals. Our aim is to enable you to pay employees equitably and help you demonstrate that you are doing so.

With our deep multi-disciplinary expertise in reward, employment law, technology & analytics, and behaviour change, we are well-placed to be your trusted partner on this journey. Get in touch to discuss your challenges and needs.

Kathryn Dooks, Partner, Deloitte Legal, 020 7303 2894

Deepinder Lamba, Partner, Deloitte Global Employer Services, 020 7007 2689

Note: The information provided is for general informational purposes only and may not be complete or up-to-date. Do not rely on this information without seeking professional advice. Deloitte LLP accepts no liability for any loss occasioned by any person acting or refraining from action as a result of this content