Glossary

Pay transparency glossary

Plain-language definitions of the terms the EU Pay Transparency Directive uses — and what each means for employers.

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EU Pay Transparency Directive: Directive (EU) 2023/970, the EU law that tackles the gender pay gap through transparency. Member states must transpose it into national law by 7 June 2026.
Work of equal value: Different jobs that are equivalent when assessed on objective, gender-neutral criteria — skills, effort, responsibility and working conditions. Equal pay applies across roles of equal value, not only identical ones.
Gender pay gap: The difference between the average pay of women and men, usually expressed as a percentage. The directive requires it to be reported overall and for categories of workers doing equal work.
Gender-neutral job evaluation: A structured method for comparing jobs using objective criteria that don't favour one sex, used to establish work of equal value and to justify pay differences.
Statutory pay-gap report (Article 9): The mandatory report in-scope employers file with a national authority, showing their gender pay gap overall and by category of worker, on a set cadence.
Joint pay assessment (Article 10): A review an employer must carry out with worker representatives when reporting shows an unjustified average gap of 5% or more in a category that isn't closed within six months.
Right to information (Article 7): Employees' right to receive the average pay for their category of work broken down by sex, and to be told of this right. Pay-secrecy clauses that block it are prohibited.
Pay transparency in recruitment: The duty to share starting pay or a range with candidates before interview, the ban on asking about pay history, and the requirement that adverts and job titles be gender-neutral.
Categories of workers: Groups of employees performing the same work or work of equal value, used as the unit for pay-gap reporting and for triggering a joint pay assessment.
Mean and median pay gap: Two ways of averaging pay differences: the mean is the arithmetic average, the median the midpoint. The directive requires both to be reported.
Pay quartiles: Four equal bands the workforce is divided into by pay level; reporting shows the proportion of women and men in each, revealing vertical segregation.
Reporting thresholds: The headcount levels at which reporting applies — 250, then 150, then 100 employees — phasing in over several years. National law sets the exact figures and dates.
Transposition: The process by which each member state writes an EU directive into its own national law. You comply with the transposing statute, not the directive itself.
Competent authority (monitoring body): The national body designated to receive pay-gap reports, monitor compliance and support enforcement. It differs by country.
Burden of proof: In equal-pay disputes the directive shifts the burden to the employer: once a worker shows a possible breach, the employer must prove no discrimination occurred.
Remuneration (pay): The full value an employee receives — basic salary plus any complementary or variable components such as bonuses, allowances and benefits. The gap is measured on total remuneration.