EU Pay Transparency: A Founder's Guidebook

Pay transparency is coming to every European team, whatever its size.

Pay transparency is coming to every European team, whatever its size.

The work that makes you compliant (clear job groups, documented pay criteria, clean data) is the same work that makes you a better place to build a career.

Following our latest webinar on this topic, co-hosted with IRIS, Serena, and Ravio, we are happy to share this consolidated EU PAY TRANSPARENCY: A FOUNDER’S GUIDEBOOK with you.

The prep work as a startup founder and HR Lead starts now!

Webinar Recording and Slides

Watch the recording here. Password: b=6$X4e@

WHERE THINGS STAND

The directive was agreed in 2023 and gave member states until June 2026 to write it into national law. Most missed the deadline, and each is now moving at its own pace and in its own direction.

The transposition map, September 2026

• Five countries have fully transposed. Only Italy and Malta have requirements in force today; the others are holding most obligations back until 2027 or later.

• France presented its bill to the Council of Ministers on 10 September 2026. The parliamentary debate will likely run through the second half of 2026, with a vote now expected in early 2027.

• Germany: June 2026 deadline was missed, no official date yet for national transposition.

• Austria and several others have not yet published even a draft.

• Sweden wants to renegotiate parts of the directive.

• Belgium, Denmark, Finland and the Netherlands are targeting January 2027.
  

What it means for you, a European startup founder:

If you employ people in several EU countries, one uniform approach is getting harder to hold. Some countries are going beyond the directive; others have found narrow readings that technically comply. Build one solid foundation, then adapt it country by country.

What the directive actually asks of you

Three pillars. The first two apply to every company, whatever its size.

1. Transparency towards employees — all companies

• Explain how you set pay. Share the criteria behind your pay ranges, how jobs are grouped into categories of equal value, and what differentiates pay within a category. Criteria must be objective (skills, responsibilities, effort, working conditions) and gender-neutral: you can pay for performance, but you must be able to show your performance ratings aren’t systematically biased.
  

• Answer information requests. Any employee can ask for their own pay level and the average pay of men and women in their category of worker. You need to know your groups, know your averages, and be able to explain why each person sits where they are.
  

• Pay progression criteria: Employers must make accessible to all employees the criteria used to determine pay and pay progression, job levels, and career pathways. Pay secrecy clauses are prohibited.
  

2. Transparency towards future talents (candidates) — all companies

• Share the range before negotiation — on the job post or before the first interview. France is expected to require it on the job description itself.
  

• Never ask about salary history. Asking about expectations before sharing the range is also risky. Once the range is out, asking where in it the candidate sees themselves is a far more defensible conversation.
  

• You are liable for your headhunters. If a recruiter asks a prohibited question, it’s on you. Give them the range early so every salary conversation is anchored to it.
  

• It’s total pay, not just base. Equity, variable pay and benefits are all in scope.
  

3. Reporting — larger companies only

Companies with 100+ employees will report their gender pay gap: mean and median gap, share of men and women receiving variable pay, variable pay gaps, gaps by pay quartile, and gaps per category of worker (the same groups you use to answer information requests). Under the directive, companies with 250+ employees report every year; those with 150–249 and 100–149 report every three years. Several countries, France among them, are setting stricter thresholds (probably 50, as for the index Egapro).

Most first reports are now expected in 2028, based on 2027 data. If any category shows an unjustified gap of 5% or more, a joint pay assessment with worker representatives follows. The best way to avoid one: good data, clear criteria, and fixing problems early.

THE FOUNDER’S GUIDEBOOK

The six steps, in order:

Step 1 — Assess where you are - Now

Do you have job levels? Market-benchmarked ranges? Written criteria? Be honest: the gap between today and “explainable” is the size of your project.

Step 2 — Write down how you pay - H1 2027

It sounds simple; but it rarely is. Your methodology document should cover:

• How you group jobs into categories of equal value.

• How you differentiate pay within a job title, and across jobs within a group.

• Every pay component (base, variable, equity, benefits), what it is for and who gets it.
  

This becomes the basis of what you are legally required to share. Before you finalise it, read it aloud: if an employee or a works council member read this, would they find it fair and coherent?

Use the moment to simplify. Five variable schemes that piled up over the years are much harder to justify in the open than one.

Step 3 — Decide how you communicate - H1 2027

The legal minimum is set country by country. The real question is how far beyond it you go, and whether you apply one standard everywhere, including non-EU markets such as the UK and Norway, where similar rules are likely coming.

The evidence is clear: talking openly about pay, even just saying you are working to pay fairly, raises trust and retention, whatever the analysis shows.

Step 4 — Run your pay gap analysis - H2 2027

Once your groups are defined, run the numbers: mean and median gaps per category of worker. Anything at 5% or more? Can your documented criteria explain it? If not, fix it now.

First reports use 2027 data, so what you leave unfixed this year will show up in them.

Step 5 — Implement and equip - H2 2027

Pulling total pay (base, variable, equity, benefits) into one place is harder than it looks. This is usually the point where you need a platform, or at least a structured process across payroll, HRIS and your equity tool.

Train your managers too: most have never had to explain a pay decision in this much detail.

Step 6 — Report - Q1 2028

The first reports, for companies exceeding the number of employees thresholds, are expected for 2028. Any unjustified gap of 5% or more in a category triggers a joint pay assessment with worker representatives.

The hardest question: defining categories of worker

We strongly recommend you to consult the “EU-wide guidelines on gender-neutral job evaluation and classification: Step-by-step toolkit” by the European Institute for Gender Equality.

In a nutshell:

• Group by the work, not by the market. Categories must be based on skills, effort, responsibility and working conditions. Using market benchmarks to decide which jobs sit together is not compliant.
  

• Splitting by job family is contested. The purist view: if a tech P1 and an HR P1 score the same on all four factors, they are in the same category, and any pay difference must be justified by documented criteria. The pragmatic view: many companies group by function today and accept that case law will test it. If you do this, document your reasoning and set a review trigger for when the legal picture moves.
  

• Hot skills can justify a premium. AI expertise today, for example, provided you have evidence the market pays more for it, and a plan for when that premium normalises.
  

FRANCE SPECIFICALLY

Where it stands. ‍

The government presented its transposition bill to the Council of Ministers on 10 September 2026. Parliament has not yet set a date to examine it; the Senate goes first. The text may still change, and the government has pointed to entry into force from 1 January 2028.

You have a head start. Companies with 50+ employees in France already publish the Index de l’égalité professionnelle every year. Much of the groundwork overlaps, and the bill rebuilds the Index around the directive’s indicators rather than adding a separate regime.

What to plan for:

• Lower thresholds. Obligations are expected to apply from 50 employees, below the directive’s 100, in line with France’s existing rules.
  

• Six months to agree on your categories. Once the law passes, companies are expected to have six months to agree on their categories of worker with employee representatives. That is a real constraint on your timeline, not a formality. Start the conversation with your CSE before the clock starts.
  

• Ranges on job ads. The bill requires the starting salary or a salary range in job postings.
  

• More pressure to negotiate. Where gaps exceed the thresholds, companies will have to negotiate with worker representatives, and the labour administration will be able to order negotiations to open.
  

THE BOTTOM LINE

One thread ran through the whole session: pay transparency is, at heart, a communication challenge. Structures, data and tooling are the foundation. Making sure your team understands and trusts what you are telling them is the real work, and a real advantage for the founders who get it right early.

Questions, or want an intro to another portfolio company that has been through it, or interested in a follow-up close door session to learn from the best? Reach out to the Ventech team.

This guide is for general information only and is not legal advice. Transposition is moving fast: check country-specific requirements with your counsel before acting. Status as of 30 September 2026.