The Institutional Voice

Pay Transparency Is Not About Publishing Salaries — It’s About Proving Fairness

“It is NOT about making organisations’ average salary levels public… It is about increasing visibility of pay practices and strengthening the right of information on pay issues.” - Ms. Yiota Kambouridou (Labour Relations Officer A’)

Ms. Yiota Kambouridou

Labour Relations Officer A’ - Department of Labour Relations | Ministry of Labour and Social Insurance | February 18th 2026 · 7 min read

Q: European framework – What is the background, philosophy and underlying purpose of the Directive?A: Directive (EU) 2023/970 on Pay Transparency, lays down minimum requirements to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women, in particular through pay transparency and reinforced enforcement mechanisms. What are the limits of this obligation? Member States are expected to harmonise their national legal frameworks and establish minimum common standards as laid down by the Directive, while their prerogative to introduce and maintain more favourable provisions for the workers is fully respected.A reasonable question would be why the EU has turned to binding pay transparency measures? The answer is that despite a long standing legal framework on equal pay between men and women, that goes back to the Treaty of Rome (1957) and which was regularly reinforced by EU Directives and Recommendations, an evaluation at EU level in 2020, concluded to a deficiency in the practical application of the principle of equal pay. Results actually revealed that the application was hindered by a lack of transparency in pay systems and by procedural obstacles faced by victims of discrimination, as employees lacked the necessary information to make a successful equal pay claim. Q: What was the debate around the Directive mostly about? – clarificationsA: The main goal of the Directive is to reduce the gender pay gap (currently around 12% in the EU). This is pursued by shifting the focus from a general commitment to fair pay, to a requirement to prove it through concrete, transparent measures. That is why the Pay Transparency Directive has generated significant "noise" and debate mostly among employers.Those in favour have argued that enhanced transparency will shed light on unconscious gender bias in pay systems and tackle structural distortions like "glass ceilings" and "sticky floors”. It will build trust within organisations and improve employee engagement. Businesses on the other hand, particularly SMEs, have raised concerns about the significant administrative burden of managing new reporting requirements. They have also argued about the risks on employee privacy and data protection, involved in disclosing pay data.As far as the administrative burden is concerned, the Impact Assessment that was accompanying the proposed Directive, argued on considerably low administrative costs proportionate to the size of the employer. On the data protection concerns, the Directive has provided for specific safeguards in the cases where pay data of an identifiable employee will have to be disclosed.In any case, extensive public debate on the content of the Directive to date, has made it clear that the Directive is NOT about making organisations’ average salary levels public, nor is it about allowing access to any individual employee’s salary. It is about increasing visibility of pay practices and strentghening the right of information on pay issues, aiming to bridge the gender pay gap and promote pay fairness in the workplace. Q: Cyprus - implementation stageA: The competent authority for the enforcement of Directive (EU) 2023/970 is the Department of Labour Relations - Ministry of Labour and Social Insurance. A tripartite technical committee was set up for discussing the first draft of the legislation, consisting of the five most representative employers’ and workers’ organisations in Cyprus (OEB, KEBE, SEK, PEO, DEOK), based on the Ministry’s core values of social dialogue and consensus-based policy formulation. The discussion of the draft law in the tripartite technical committee has been completed, while the draft law was also put out for public consultation via the «η-Διαβούλευση» platform (e-Consultation). The final draft is expected to go under legal review soon, and also to be discussed before the Labour Advisory Body. It will then be forwarded to the House of Representatives for voting, so as to meet the harmonization deadline which is June 7, 2026. Q: What are the Directive’s main provisions?A: The Pay Transparency Directive mainly provides for:
- The right of employees to information on pay issues
- The obligation of all employers to have pay structures and to use gender-neutral job evaluation and classification systems
- The obligation of larger employers to submit pay gap indicators, prepare reports and take measures to correct pay inequalitiesThe Directive’s requirements will actually change the way that employers and employees communicate about pay – starting before the employee is even hired. In particular, all employers will have to provide job applicants with information about the initial pay or pay range in a manner to ensure a transparent and informed negotiation on pay, prior to the job interview. Equally important, is the prohibition of asking job applicants about their pay history during an interview, or proactively trying to obtain such information.Employers will also have to make easily accessible to their workers the criteria that are used to determine pay levels and pay progression, which should be objective and gender neutral. All workers will have the right to obtain information, on their pay and on the average pay level, broken down by gender, for the category of workers doing the same work or work of equal value. Just as important, employers will no longer be able to prohibit employees from disclosing their pay (e.g., by using confidentiality or pay secrecy clauses). Lastly, the Directive introduces reporting requirements from June 2027 onwards, for employers with more than 100 employees, concerning their organisation’s pay gap, their obligation to conduct a pay assessment jointly with the employees’ representatives if certain conditions are met and to remedy any unjustified differences in pay within a reasonable period of time. Q: Any support measures by the Ministry of Labour and Social Insurance in anticipation of the new legislation?A: A smooth transition to introducing binding transparency measures in the Cyprus labour market, is crucial. We realized this early on, when we were studying and reflecting on the content of the directive. In this respect, a variety of support measures for the employers, the employees and their representatives have been designed and are currently being implemented by the Department of Labour Relations, ahead of the legislation adoption. A project with the acronym “eValueJobs”, co-funded by the Citizens, Equality, Rights and Values (CERV) 2024-GE programme, is being implemented with a consortium of partners, since December 2024, with the purpose of developing publicly available gender-neutral job evaluation tools and training the employers and the social partners on their use. Providing such tools, is actually part of the competent authorities’ obligation, as laid down in the Directive, in order to support and guide the employers in assessing and comparing the value of work, with a view to developing or reviewing their pay structures. It is important to mention that in April-May 2026 professional and industry associations but also employers in general, will be invited to training sessions both in person and online, on the use of these tools.Funding has also been secured through the Cohesion Policy Programme "THALIA 2021-2027", for the period 2025-2027, for implementing a second project titled "Support measures for pay transparency" with the purpose of developing the right infrastructure which will secure the effective implementation of the foreseen legislation but also to adequately prepare and support the employers in complying with the new obligations. Q: Any challenges and concerns identified?A: Apart from the administrative burden and data privacy concerns raised by the majority of SMEs, questions and concerns seem to be emerging from specific categories of employers such as multinational corporations and foreign interest companies, which often operate across multiple jurisdictions with differing regulatory requirements. These companies will have to manage varied compliance timelines, reporting requirements, and penalties across Europe. They may also phase the dilemma whether to adopt the highest standard of transparency globally, or manage diverse policies in each region, which may breed resentment among employees in the less transparent ones. Lastly, these companies may encounter difficulties while designing gender-neutral job architectures, but most importantly when evaluating and comparing roles and jobs across regions. Let’ s not forget that the Directive introduces the "single source" principle, where pay comparisons can be made across different entities if a central body sets the pay. Multinationals with centralized pay setting mechanisms, may therefore face broader comparability in equal pay claims. Q: Your message to workers and employers?A: It is our belief that the effective application of the foreseen pay trasnparency measures will enhance pay equality in the medium and long term.It is also our belief that early preparation will ensure a smooth transition for the benefit of all affected parties.Our advice to employers is for an early assessment of their organisation’ s readiness to fulfill the pay trasnparency obligations. If necessary, review and update your policies and employment contracts to identify and eliminate any company practices or clauses which prohibit employees’ right to discuss their pay. Review and update job descriptions to ensure they are gender-neutral. Begin to establish objective, gender-neutral criteria that will guide your pay policies. In this respect, utilise the gender-neutral job evaluation tools developed by the Ministry of Labour, to help you establish or review your pay structures. Group roles of equal value to allow for accurate pay comparisons. Prepare systems to collect and analyse gender‑segregated pay data. You can even attempt to calculate the gender pay gap in your organisation and get valuable insight of the situation, ahead of the first reporting deadline (June 2027). Map and analyse any unjustifiable disparities. Final Note from Author_{Thank you for this conversation and for giving me the opportunity to reach out to both the employers and the employees on this important topic.I really hope readers take away that increased pay transparency will eliminate unconcsious bias, will strengthen employee trust in pay decisions, employee retention and engagement. The Department of Labour Relations is systematically working on preparing the ground for this transition.Although initially challenging, we believe these measures can cultivate a more engaged, motivated, and productive workforce.} Ms. Yiota Kambouridou for TheTop10Voices Initiative (Employees, HR, and C-Suite)

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