Why pay transparency affects more businesses than many think
On 7 June 2026, the deadline for EU member states to transpose Directive (EU) 2023/970, better known as the Pay Transparency Directive, expired. Sweden let the deadline pass. On 26 March 2026 the government announced that it does not intend to put an implementation bill before the Riksdag for now, and that it wants the directive renegotiated at EU level. Many Swedish business owners have read this as meaning that pay transparency is off the table. That conclusion is premature, and for companies with employees elsewhere in the EU it is simply wrong.
The directive itself remains in force at EU level, the European Commission has made clear that it expects all member states to implement it, and several countries have already done so. Meanwhile, Sweden’s existing equal pay rules continue to apply in full.
What is the Pay Transparency Directive?
Directive (EU) 2023/970 was adopted on 10 May 2023 to strengthen the principle of equal pay for equal work, or work of equal value, through openness about pay. It gives job applicants the right to information about the starting pay or pay range for a position before the interview, and it prohibits employers from asking candidates about their pay history.
It also gives employees the right to request the average pay levels, broken down by sex, for colleagues performing equal work, bans pay secrecy clauses, and introduces gender pay gap reporting for employers with at least 100 employees. Where reporting reveals an unexplained gap of five percent or more, the employer must carry out a joint pay assessment together with worker representatives.
What has Sweden decided?
Sweden voted against the directive when it was adopted in 2023, arguing that it fits poorly with the Swedish labour market model of collective bargaining and existing equal pay legislation. In January 2026 the government nevertheless presented draft legislation amending the Discrimination Act, with entry into force proposed for 1 July 2026. In March the date was pushed to 1 January 2027, and on 26 March 2026 the government changed course entirely: it will seek a renegotiation of the directive at EU level and will not, for now, submit a bill to the Riksdag.
Sweden is not alone in raising concerns. BusinessEurope asked the Commission in February 2026 to pause the directive for two years. The Commission has so far held the line: the transposition deadline of 7 June 2026 stood, and no postponement was granted.
What still applies for Swedish employers?
A directive does not, as a rule, create obligations for private employers until it is transposed into national law. But that is no reason to relax. The Discrimination Act already requires every Swedish employer to carry out an annual salary survey (lönekartläggning), and employers with ten or more employees must document it in writing. The EU principle of equal pay for equal work in Article 157 TFEU also applies directly.
Two further effects deserve attention. Public sector employers may face claims based directly on the directive now that the deadline has passed, since sufficiently clear provisions of a directive can be invoked against the state. And Swedish courts may begin to interpret existing legislation in the light of the directive’s purpose.
Which rules apply elsewhere in the EU?
For companies with employees in other member states, the picture is fragmented. Slovakia adopted comprehensive implementing legislation in April 2026, with core duties applying from 7 June 2026, including the obligation to give candidates pay information before the interview. Italy, Lithuania and Romania aimed to have their laws in force by the deadline. Czechia, Denmark, Finland, France, Ireland, the Netherlands and Poland are working towards later dates. Compliance therefore has to be assessed country by country, based on each national implementing law rather than on the directive itself.
A practical example
Consider a Swedish software company with 85 employees in Stockholm and a sales team of ten in Bratislava. In Sweden, recruitment can continue as before: there is currently no obligation to state a salary range in job advertisements, although the company must keep its annual salary survey up to date. In Slovakia, the same company must from 7 June 2026 give every candidate information about pay before the interview and must have objective criteria in place for assessing what constitutes work of equal value. The same role, advertised in two countries, is now subject to two different sets of rules.
Common mistakes
The most common mistake right now is treating the Swedish government’s announcement as if the directive had been repealed. It has not; it remains binding EU law, and the outcome of the renegotiation initiative is uncertain. A second mistake is neglecting the salary survey obligation that already exists, which the Equality Ombudsman supervises. A third is continuing to ask candidates about their current salary in countries where that question is now prohibited. A fourth is postponing the groundwork, since job architecture, pay structures and objective criteria take considerably longer to build than most companies expect.
Recommended actions
Start by mapping where your company has employees and monitor the implementing legislation in each of those countries. Keep the Swedish salary survey current and documented, and treat it as a foundation rather than a formality. Review recruitment templates and interview guides, and remove questions about salary history for positions in countries where the ban applies. Begin defining objective criteria for equal work and work of equal value, because they sit at the heart of the directive and of existing Swedish law alike. Finally, follow the renegotiation debate during autumn 2026, and be ready to act if Sweden presents a new bill.
Frequently asked questions
Do we have to publish salary ranges in Swedish job advertisements?
No. Sweden has not transposed the directive, so there is no such statutory duty today. If you recruit for positions in countries that have implemented the rules, such as Slovakia, pay information duties apply there. Many companies nevertheless disclose ranges voluntarily to strengthen their employer brand.
What happens if Sweden never implements the directive?
The European Commission can open infringement proceedings, and the Court of Justice can impose substantial fines on Sweden as a state. Spain was fined 6.83 million euro in a similar situation concerning another directive. Obligations for private employers, however, only arise once Swedish implementing legislation is adopted.
Which employers will have to report their gender pay gap?
Under the directive, employers with at least 100 employees. Those with 250 or more report annually from June 2027, those with 150 to 249 every three years from 2027, and those with 100 to 149 from 2031. In Sweden, timing depends on future implementation.
Conclusion
The Pay Transparency Directive has not disappeared because Sweden pressed pause. The EU deadline has passed, several member states have implemented the rules, and Swedish employers still carry extensive equal pay obligations under existing law. Companies that build sound pay structures now will meet whatever version of the directive eventually lands with confidence, and they will be stronger in recruitment in the meantime. At Lawgent, we help companies design pay transparency and equal pay compliance that works in practice, in Sweden and across the EU. Get in touch if you would like to know what the directive means for your business.
