The EU Pay Transparency Directive has moved from a future compliance issue to an implementation issue. For hospitals, the priority is not only to prepare reports: it is to ensure that recruitment, job classification, pay structures and progression decisions can be explained through objective and gender-neutral criteria.
European Union | 8 October 2026
Directive (EU) 2023/970 strengthens the application of the principle of equal pay for women and men for equal work or work of equal value through new transparency and enforcement mechanisms.
EU Member States were required to transpose the Directive into national law by 7 June 2026. The European Commission is now focusing on the conformity of national legislation with the Directive. For any individual hospital, the precise obligations that apply must therefore be checked against national transposition and, where relevant, collective agreements.
The European framework is nevertheless sufficiently clear for hospital employers to review their systems now. The Commission and the European Institute for Gender Equality also launched EU-wide guidance on gender-neutral job evaluation and classification in March 2026, and the Commission published an updated Pay Transparency Directive FAQ in August 2026.
Pay transparency is not only a payroll exercise
Hospitals are complex employers with multiple professions, grades, supplements, shift arrangements, responsibilities and career structures. The Directive therefore reaches beyond the salary figure itself into job evaluation, recruitment, progression, workforce data and management accountability.
The management question is not simply “Do we pay men and women the same?” It is “Can we demonstrate that work of equal value is identified and rewarded through objective, transparent and gender-neutral criteria?”
What does the Directive introduce?
Recruitment
Applicants have a right to information on initial pay or its range before employment, and employers must not ask applicants about pay history.
Worker information
Workers gain rights to request information on their individual pay and average pay levels, broken down by sex, for categories doing the same work or work of equal value.
Pay reporting
Employers with at least 100 workers enter a phased reporting framework, with the first EU deadlines depending on organisational size.
Enforcement
The Directive strengthens remedies, compensation, penalties and burden-of-proof mechanisms where equal-pay rights or transparency obligations are not respected.
“Work of equal value” is particularly important for hospitals
Healthcare organisations employ people in very different professional groups. Equal-pay analysis cannot therefore be limited to identical job titles.
The Directive requires pay structures that make it possible to assess whether workers are in a comparable situation regarding the value of work, using objective and gender-neutral criteria. The Directive identifies factors including skills, effort, responsibility and working conditions, and the Commission/EIGE guidance is intended to help employers apply gender-neutral job evaluation and classification.
For hospitals, this may require reviewing how professional qualifications, decision-making responsibility, leadership duties, workload, working conditions and other relevant factors are reflected in job architecture, grading and progression.
Managers should also consider complementary and variable components of remuneration. The Directive’s reporting framework includes these elements, not only ordinary basic salary.
Recruitment processes need to change
Hospitals should review how pay information is communicated to candidates and how salary negotiation is conducted. The Directive aims to ensure that applicants can make an informed decision without perpetuating historic pay differences through questions about previous salary.
Recruitment teams should review:
- job advertisements and candidate information;
- salary-band or starting-pay communication;
- interview guidance for recruiting managers;
- agency and executive-search practices;
- job titles and descriptions;
- local discretion and exceptions in starting pay.
Existing staff gain stronger information rights
Workers can request information about their individual pay level and the average pay levels, broken down by sex, for categories of workers performing the same work or work of equal value. Employers must also make criteria used to determine pay, pay levels and pay progression easily accessible, subject to the possibilities allowed under national implementation for some smaller employers.
For hospitals, this creates a practical test: can managers, HR teams and payroll systems explain how pay and progression decisions are made without relying on undocumented custom or inconsistent local practice?
Four management workstreams
- Job architecture: ensure categories, grades and progression criteria are coherent, documented and gender-neutral.
- Recruitment: provide pay information at the appropriate stage and remove salary-history questions.
- Data: prepare systems to calculate the required gender-pay indicators, including complementary and variable components.
- Governance: create a process for reviewing unexplained differences, engaging workers’ representatives and documenting corrective action.
The reporting timetable
Member States may impose additional requirements, including reporting obligations on employers with fewer than 100 workers. Hospitals must therefore check the national legislation applicable to them.
What is the 5% trigger?
A joint pay assessment is required under the Directive where all three conditions are met:
- pay reporting shows a difference of at least 5% in the average pay level between female and male workers in a category of workers;
- the employer cannot justify that difference using objective, gender-neutral criteria; and
- the unjustified difference has not been remedied within six months of submitting the pay report.
The joint assessment is carried out in cooperation with workers’ representatives and is intended to identify, remedy and prevent unjustified pay differences.
This should encourage hospitals to investigate potential problems early rather than waiting for formal reporting to expose them.
Data readiness may be the hidden challenge
Large healthcare employers often operate multiple payroll arrangements, professional categories, contractual histories and supplements. Producing legally required pay indicators may therefore be more difficult than producing a simple organisational gender pay gap.
Hospitals should test whether their systems can reliably identify:
- categories of workers performing the same work or work of equal value;
- ordinary basic salary;
- complementary or variable components;
- median and average differences;
- pay-band distributions;
- progression and change over time.
A practical 90-day agenda for hospital employers
Map national obligations
Confirm the status and content of national transposition and identify the rules applying to recruitment, worker information, reporting and enforcement.
Assign an executive sponsor across HR, finance, legal and workforce functions.
Test structures and data
Review job categories, pay components, progression criteria and the ability of HR/payroll systems to produce the required analysis.
Run an internal diagnostic to identify unexplained differences before formal reporting.
Embed transparency
Update recruitment guidance, manager training, employee-information processes and governance for reviewing pay differences.
Create a reporting roadmap based on organisation size and national requirements.
Why this matters for workforce strategy
Pay transparency will not solve Europe’s health workforce shortages. But in a competitive labour market, opaque or difficult-to-explain pay systems can damage trust and make recruitment and retention harder.
Hospitals should therefore see the Directive as both a compliance challenge and an opportunity to strengthen workforce governance, data quality and the consistency of employment practices.
Seven questions for every hospital board
- What does our national transposition of Directive (EU) 2023/970 require from us now?
- Can our job-evaluation and classification system demonstrate objective and gender-neutral criteria?
- Are recruitment teams providing the required pay information and avoiding salary-history questions?
- Can our HR and payroll systems produce the reporting indicators required by the Directive?
- Have we analysed variable pay, supplements and progression as well as base salary?
- Do we have a process to investigate and remedy unexplained differences before formal reporting?
- Can managers explain how pay and progression decisions are made?
From transparency to trust
The strongest response is not to treat pay transparency as a one-off reporting exercise. Hospitals should use implementation to strengthen job architecture, workforce data and the clarity of employment practices.
Recruit. Classify. Compare. Explain. Correct.
Transparent pay starts with transparent workforce governance.
Official resources
This article reflects the EU framework in September 2026 and provides general information, not legal advice. Directive (EU) 2023/970 requires national transposition; hospitals should verify the legislation, collective arrangements and reporting rules applicable in each Member State in which they operate.
Secretary-General perspective
In healthcare systems competing for scarce professionals, fairness and transparency are not peripheral HR issues. They are part of the trust that organisations need to recruit, retain and develop their workforce.
Leandro Luís · Secretary-General, European Association of Hospital Managers