What the directive requires.
The Pay Transparency Directive requires employers to make their pay structures transparent, document the objective criteria they use to set pay, and report pay differences between the sexes. It is no longer enough to claim that pay differences are objectively justified - it must be possible to prove it.
- Art. 5 Duty to disclose the pay level (or range) in job postings and during the hiring process. Prohibition on asking candidates about their previous pay.
- Art. 6-7 Duty to inform employees of the objective criteria for pay, pay progression and promotion.
- Art. 9 Reporting obligation: pay differences must be reported to the authorities, broken down by employee categories of equal value.
- Art. 10 Duty to carry out a joint pay assessment if reporting reveals an unexplained pay difference of 5 percent or more in an employee category. Carried out together with employee representatives.
- Art. 18 The burden of proof is reversed: if an employee can show signs of discrimination, the employer must prove the opposite.
- Art. 23 Sanctions must be effective, proportionate and dissuasive. They include fines, litigation and potential exclusion from public tenders.
Timeline for implementation.
The directive must be implemented nationally by 7 June 2026 at the latest. The Danish bill went into consultation in February 2026. Reporting obligations take effect gradually depending on company size.
The Ministry of Employment sends the bill into consultation among the social partners and industry stakeholders.
The EU deadline for the national legislation to be in place.
Companies must now meet the directive's requirements in their HR practice.
The largest companies report pay differences at employee-category level for the first time.
Smaller companies also begin reporting. Medium-sized companies should have their pay structure in place well in advance.
The burden of proof is reversed.
This is the most substantial change the directive brings to Danish law. Where it was previously the employee's task to prove discrimination, under Article 18 the employer must now prove the opposite as soon as the employee can show signs of discrimination.
In practice this means that the employer who has not documented its pay criteria in writing stands weak in a case. Written, objective, consistently applied pay criteria are no longer best practice - they are legal certainty.
The employer who cannot produce documented pay criteria in a case will lose it. This is not a hypothetical risk - it is the new legal reality from the moment the law takes effect.
What must be documented.
Most companies already have a pay policy, but it is rarely written in a way that meets the directive's requirements. We review your current practice and prepare documentation that can stand on its own in a potential case.
Pay criteria in writing
Which objective factors affect pay? Education, experience, responsibility, complexity, performance? Each factor must be defined and applied in a measurable way.
Pay structure and categories
How do you divide your employees into categories of "equal work" or "work of equal value"? That is the unit pay differences are measured on.
Process descriptions
How is pay set on hiring, at pay negotiation, on promotion? Who makes the decision, and which criteria weigh how?
Reporting-ready structure
The HR system must be able to extract pay differences per employee category and per sex in a format that matches the reporting requirements. This must be prepared now, not when the deadline hits.
When should we get involved.
We recommend that companies with 50+ employees begin preparation in 2026, not 2027. Pay structure is not something that can be fixed in three months if a case is raised - it is HR infrastructure that must be built over time.
Typical situations where we get involved:
- You are preparing implementation and want advice on what the directive specifically means for you
- You are reviewing your pay structure and pay criteria to assess whether they can withstand daylight
- You are preparing or updating a pay policy, job-posting practice and pay-negotiation processes
- An employee or trade union has raised questions about your pay practice
- You are subject to public procurement and want to ensure that directive compliance does not exclude you from future tenders
How we work together.
For pay transparency our collaboration can take two forms. One is the defined project, where we review your current pay structure and prepare a pay policy and pay criteria that hold up under the directive's requirements. The other is the ongoing collaboration, where we are the HR leadership's sparring partner throughout the implementation period and keep you updated as legislation or practice develops.
We take our starting point in the size of company you are and the field you work in. An 80-person tech company has different challenges than a 300-person manufacturing company, and the collaboration must reflect that.
Send us a short description of your situation (number of employees, industry, where you stand with the pay structure), and we will come back with a concrete assessment and a proposal for collaboration.
Shall we review your pay structure?
The first conversation is without obligation. Together we assess where you stand, and what specifically needs to be done before the law takes effect.