The Equal Pay Directive

Entrepreneurs operating in Poland have been struggling for years with new regulations on hiring employees. In the past year, there was a significant amendment to the Labor Code in the area of remote work and sobriety testing, while 2024 was dominated by the Law on the Protection of Whistleblowers. Another challenge facing employers in the near future is the so-called Equal Pay Directive. We invite you to read an article outlining the basics of the latest regulation.  

Purpose of the new rules 

The main objective of Directive (EU) 2023/970 of the European Parliament and of the Council is to combat wage discrimination and eliminate the gender pay gap. The new obligations and sanctions imposed on employers are aimed at systemically tackling the pay gap between women and men for doing the same work or work of equal value. 

It should be stressed that the Directive does not interfere with employers’ powers to set internal pay rules for their employees, but only creates mechanisms to sanction pay differentials based on gender. 

The entities affected by the new regulations 

The Directive applies to the situation of individuals with a contract of employment or an employment relationship and job applicants. From the employer’s perspective, it covers both public and private entities. 

Scope of new responsibilities 

The entry into force of equal pay legislation will oblige employers to implement additional obligations. Below are a selection of the new rules regarding the establishment and duration of pay relationships: 

1. the obligation to provide candidates with information on the starting salary or salary range and, in certain situations, the provisions of the collective agreement for the position; 

1. a prohibition on asking job applicants about the remuneration received currently or in previously held positions; 

1. providing employees with easy access to the internal criteria used to determine remuneration, levels and progression of remuneration; 

1. providing employees with written information on individual remuneration levels and average remuneration levels, broken down by gender, for categories of employees doing the same work as them or work of equal value to their work; 

1. prohibiting the use of provisions in contracts with employees that introduce pay confidentiality; 

1. an obligation to report on the scope of the Directive, in particular on the pay gap. 

The obligations of entrepreneurs and the way in which they will be implemented will be specified in the national legislation issued in implementation of the Directive. 

Penalties for infringements 

The Directive provides for a number of severe sanctions for breaches of its provisions. The safeguards provided by the Directive include, in particular: 

1. the employee’s entitlement to compensation or satisfaction including full recovery of outstanding wages and related bonuses or benefits in kind, compensation for lost opportunities, compensation for intangible damages and compensation for damages caused by other relevant factors, which may include cross discrimination, as well as prejudgment interest. Importantly, the amount of compensation or reparation is not subject to a maximum amount; 

1. the possibility of imposing an order on the employer to put an end to a breach or to an order to take measures to ensure that the rights or obligations relating to the principle of equal pay are applied. Failure to comply with the above orders will entail the power of the competent authorities to impose recurrent fines; 

1. the possibility of imposing a fine on the employer. 

The Directive in Article 24 section 2 gives Member States the power to introduce an additional sanction of excluding from public procurement procedures an entity which does not comply with the provisions of the Directive or which has a pay gap equal to or greater than 5%.  

It should also be pointed out that the burden of proof in this type of case will be shifted to the employer, meaning that it will be the employer who will have to prove that there has been no discrimination in a given case.  

Entry into force of the new rules 

Member States were obliged to implement national legislation implementing the Directive by 7 June 2026. Of course, the Directive only sets out a minimum level of protection for employers, so we can expect that the national legislator will decide to tighten the Polish rules. 

Bearing in mind that the Directive forces the employer, in a way, to remodel the existing salary grid system or to evaluate the current jobs, we recommend starting the necessary audits and preparing an internal change strategy now. 

We invite you to contact our specialists, who will help you develop the most optimal solutions suitable for your organization.