In a nutshell: The EU Pay Transparency Directive creates information rights for employees and reporting obligations for employers that must be regulated by data protection rules—without specifying minimum group sizes for comparison groups.
The new EU Pay Transparency Directive requires employers to disclose wage and salary structures. This creates significant tensions between transparency requirements and data protection under the GDPR and BDSG.
The Pay Transparency Directive expands existing transparency obligations in two central areas: First, under Article 7 Paragraph 1, employees have the right to learn their individual compensation and the average compensation of comparable employee groups, broken down by gender and by employees performing the same or equivalent work. The Directive contains no provision on minimum group sizes for comparison groups.
Second, employers with more than 100 employees are subject to reporting obligations: Companies with 250 or more employees must report for the first time by June 7, 2027, and annually thereafter. Companies with 150–249 employees must report for the first time by June 7, 2027, and then every three years. For companies with 100–149 employees, the reporting obligation begins on June 7, 2031, and every three years thereafter. Member States may lower the threshold to smaller companies.
The reports must cover the gender pay gap (the difference in average compensation between women and men) and the median gender pay gap (based on median income). Depending on company size and personnel structure, this data can be attributable to individuals or enable the re-identification of individual employees.
The core tension arises from the conflict between promoting transparency and data protection: the processing of personal data in the employment context is subject to the GDPR and BDSG and requires a legal basis. Particularly with small comparison groups, there is a risk that conclusions about individual employees can be drawn, resulting in an unauthorized disclosure of personal data. Employers must therefore be able to communicate transparently without revealing personal data—a requirement that brings considerable legal and operational challenges.
Source: www.activemind.legal · Published June 12, 2026
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