January 2026
Equal pay between women and men as a fundamental principle in the pursuit of gender equality in the workplace is nothing new. It is expressly provided for in Article 4 of Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation. However, the gender pay gap continues to exist across all sectors. The lack of transparency in pay systems—which prevents gender bias and discrimination in companies’ remuneration policies from coming to light—together with the lack of legal certainty surrounding the concept of “work of equal value”, has hindered the effective application of the principle of equality and non-discrimination in pay between women and men.
The new Pay Transparency Directive (Directive (EU) 2023/970)—which must be transposed into national law by no later than 7 June 2026—aims to support and reinforce the achievement of this equality.
Although Spain already has a specific regulatory framework on pay equality (Articles 28 of the Workers’ Statute, Organic Law 3/2007, Royal Decree 902/2020 and Law 15/2022), the Directive introduces a higher level of technical and operational requirements. These requirements oblige—or at least strongly encourage—companies to review or redesign their existing legal tools and instruments relating to pay structures, internal transparency, vacancy management, pay audits, data protection, and complaint and redress procedures.
The technical complexity of the subject, combined with the need to integrate principles of EU law, anti-discrimination law, labour law and, where applicable, data protection legislation, calls for a systematic, rigorous and cross-cutting approach.
The Directive sets out numerous obligations which are likely to apply in Spain once transposed, including the following:
- Pay transparency prior to employment
Spanish law currently does not provide for any legal measures to guarantee pay transparency prior to employment. It will therefore be necessary to introduce the relevant legal or regulatory provisions to ensure that job applicants receive information on: (i) the initial pay or initial pay range, based on objective and gender-neutral criteria, for the position concerned; and (ii) the relevant provisions of the collective agreement applied by the employer in relation to that position. Employers will be prohibited from asking applicants about their pay history in current or previous employment relationships. In addition, employers must ensure that: (i) job vacancy notices and job titles are gender-neutral; and (ii) recruitment processes are conducted in a non-discriminatory manner.
- Pay transparency during the employment relationship
Companies will also be required to ensure transparency in their pay-setting policies and pay progression systems. To this end, employers must make easily accessible to their workforce the criteria used to determine employees’ pay, pay levels and pay progression. These criteria must be objective and gender-neutral. Member States may exempt employers with fewer than 50 employees from the obligation relating to pay progression.
Employees will also have the right to request and receive, in writing, information on: (i) their individual pay level; and (ii) the average pay levels, broken down by sex, for categories of workers performing the same work or work of equal value.
Employees may request and receive this information either through their workers’ representatives or through an equality body. Employers must inform the entire workforce annually of this right and of the steps required to exercise it. Employees may not be prevented from disclosing their pay for the purpose of enforcing the principle of equal pay.
- Reduction of the gender pay gap
The Directive lowers to 5% the average pay difference between female and male workers beyond which the company must justify that such difference is based solely on objective and gender-neutral criteria, provided that the unjustified pay gap has not been remedied within six months of the submission of pay information. In such cases, the company will be required to carry out a joint pay assessment, in cooperation with workers’ legal representatives.
In addition to reducing the threshold, a significant and far-reaching new obligation is introduced: companies must publish their gender pay gap on their website or through any other means of dissemination, thereby making public a piece of information that has until now remained opaque to third parties outside the organisation.
In short, companies will face numerous challenges once the Directive is transposed. These will range from finding the right balance between transparency, confidentiality and the protection of sensitive data, to the inevitable shift towards remuneration policies in which the traditional culture of salary confidentiality gives way to a pay culture genuinely committed to equality. This transition will not be possible without increased investment in resources for pay audits and pay registers, nor without appropriate awareness-raising and training of employees on the benefits of pay transparency.
Montserrat Alonso
Partner
