Preparing for the EU Pay Transparency Directive - What Employers Need to Know
July 10, 2025
The landscape of pay and transparency in the workplace is about to undergo a significant shift. The EU Pay Transparency Directive, adopted in 2023, will have far-reaching implications for businesses across Ireland and the wider European Union. At MSS The HR People, we’re already working with clients to get ahead of these changes and to turn compliance into an opportunity for stronger engagement and trust.
Here’s what you need to know about how this directive will impact your organisation, and how we can help you prepare.
What Is the EU Pay Transparency Directive?
The Directive introduces new obligations for employers designed to strengthen the right to equal pay for equal work or work of equal value. The aim is to tackle the persistent gender pay gap by improving pay transparency and accountability.
Member States have until June 2026 to transpose the Directive into national law. However, employers shouldn’t wait to act, as many of the changes will require significant planning and system updates.
Key Requirements That Will Affect Your Business
While the final details in Ireland will depend on national legislation, the Directive and Ireland’s existing Gender Pay Gap Information Act together set out clear obligations that employers will need to follow, including:
1. Pay Transparency for Job Candidates
- You will need to disclose the initial pay level or pay range in job adverts or before interviews.
- Candidates will have the right to request information on pay and progression criteria before accepting an offer.
2. Clear Pay Structures and Criteria
- Pay-setting and career progression policies must be transparent, objective, and gender-neutral.
- Employees will have the right to know how their pay is determined.
3. Right to Information
- Employees will be entitled to request details of their individual pay level and average pay levels for categories of employees doing the same or equivalent work, broken down by gender.
4. Regular Pay Reporting
- In Ireland, under the Gender Pay Gap Information Act, employers must already publish annual gender pay gap reports. From 2025, organisations with 50+ employees are required to report.
- If unjustified pay gaps of 5% or more are identified, under the Directive, you may be obliged to carry out a pay assessment and take action.
5. Restrictions on Pay Secrecy
- Employers will no longer be able to impose contractual pay secrecy clauses preventing employees from discussing pay.
6. Enforcement and Penalties
- Employees who believe they are underpaid will have access to remedies, including compensation.
- The burden of proof may shift to the employer to demonstrate that no discrimination occurred.
What Impact Will This Have?
These changes are significant and will require careful planning, robust policies, and cultural change. Key areas of impact include:
- Recruitment Processes: Updating job descriptions, adverts, and offer procedures to include pay ranges.
- HR Policies and Contracts: Removing pay secrecy clauses and ensuring objective pay criteria.
- HR Systems: Ensuring you can generate accurate reporting data broken down by role and gender.
- Creating Clear, Gender-Neutral Pay Structures: Designing or updating your pay frameworks to define how pay is set, how roles are evaluated, and how progression happens, so that decisions are transparent, fair, and easy to communicate.
- Employee Relations: Preparing to respond to more frequent pay-related queries and potential grievances.
- Resourcing: Dedicating time and expertise to comply with reporting and assessment requirements.
How Can You Prepare Now?
Although the Irish legislation implementing parts of the Directive is still pending, proactive steps will reduce compliance risks and demonstrate your commitment to fairness:
- Conduct a Pay Audit
Review your pay structures and practices to identify any gaps or inconsistencies. - Update Job Descriptions and Recruitment Materials
Ensure that salary ranges are clear and transparent. - Review Contracts and Policies
Check for pay secrecy clauses. - Develop Clear, Gender-Neutral Pay Criteria
Document how pay decisions are made and ensure consistency across the organisation. - Prepare Communication Plans
Equip managers to handle questions and share information confidently and accurately.
How MSS The HR People Can Help
We know this can feel overwhelming, especially for organisations without dedicated in-house HR or reward teams. At MSS The HR People, we support clients across all sectors to navigate regulatory change practically and sensitively.
Our team can help you:
- Undertake a pay and policy review to identify areas of risk.
- Develop or update pay frameworks to ensure they are transparent and legally compliant.
- Train your HR team and managers on the new requirements.
- Prepare your pay reporting templates in line with the Directive and Irish regulations.
- Support employee communications to build trust and engagement.
- Advise on grievances or claims linked to pay transparency or equality.
The EU Pay Transparency Directive, combined with Ireland’s existing gender pay gap legislation, is a decisive step towards pay equity and it will bring new expectations for employers. Early action will not only ensure compliance but also strengthen your employer brand and employee trust.
If you’d like to discuss how these changes could affect your business and what you can do now, contact us today. Our HR consultants are ready to guide you through each step.
Get in touch with MSS The HR People: info@mssthehrpeople.ie PH: 018870690
Last minute regulation signed by the Minister for Social Protection provides important clarification for employers ahead of the introduction of My Future Fund.
The Directive is designed to address gender pay inequality by increasing transparency around pay, recruitment practices and internal pay structures.
With effect from 1 January 2026, the National Minimum Wage in Ireland has increased to €14.15 per hour.
Many employees return to work having reflected on their roles, workload, pay, long term career plans etc. For some, this results in handing in their notice.
A recent WRC decision has reinforced the strength of maternity protection law with €20,000 compensation made to an employee following the disclosure of her pregnancy
A recent WRC decision has issued strong criticism of an employer’s handling of a sexual harassment complaint, with compensation of €86,717 awarded for discrimination
SMEs Should Prepare Now for 2026 As we reach the end of 2025, the Workplace Relations Commission is continuing to increase its inspection activity. Over the past three years, inspections have become more frequent, more targeted, and increasingly unannounced, a trend that shows no sign of slowing as we move into 2026. For employers, especially SMEs with limited internal HR capacity, this means one thing: the best time to prepare is now, before year-end pressures take over and before the next inspection cycle begins. Inspection Activity Has Risen Year on Year Publicly available data shows a clear upward trend: • 2022: 3,943 inspections, approx. 60% unannounced • 2023: 4,727 inspections, 3,662 unannounced (approx. 77 %) • 2024: 5,156 inspections, with the WRC confirming a further increase in unannounced site visits, particularly in targeted and joint operations (eg. Revenue, Garda National Immigration Bureau, Social Welfare, etc.) That is a 30% rise in total inspections in just two years, and early indications suggest the WRC will maintain this pace into 2026. Why This Matters for SMEs SMEs make up over 99% of businesses in Ireland, and many do not have a dedicated HR or compliance function. This makes them more vulnerable during an unannounced WRC inspection, where documentation must be produced immediately and the consequences of being unprepared are far more significant for SMEs who cannot absorb: • Financial penalties • Compliance orders • Disruption to operations • Reputational damage • Staff time diverted to crisis management With the increasing trend in enforcement activity and unannounced visits, SMEs should assume they could be selected for inspection in 2026 and ensure they have the systems, documentation and records ready. Why Employers Need to Be Ready Going Into 2026 The WRC’s annual reports typically publish in Q2, meaning the full 2025 inspection breakdown will not be available until mid-2026. However, current patterns indicate: • Increased unannounced inspections across all sectors • More joint visits with Revenue, Social Protection and Gardaí • Focus on working time, payroll accuracy, permits and record-keeping • Less tolerance for incomplete or inconsistent documentation Preparing now ensures your business, particularly if you are an SME without in-house support, is not left vulnerable. Key Areas Under Scrutiny During an inspection, employers must produce statutory documentation immediately, including: • Contracts of employment • Working time and break records • Payroll and pay-reference-period data • Annual leave and public holiday records and calculations • Employment permit documentation • HR policies, procedures and statutory records MSS- WRC Inspection Preparation Audit (Particularly designed for SMEs) Our Audit help employers get ahead before year-end, MSS The HR People offer a structured WRC Inspection Preparation Audit, specifically designed to support SMEs who may not have a full HR team. Our six-step process includes: Compliance Audit: Review of contracts, policies and statutory documentation Record-Keeping & Documentation Review: Templates and statutory checklists Corrective Action Plan: Clear and practical steps to close any gaps Mock WRC Inspection: A simulated visit with a full written report On-Call Support on the Day: Expert HR assistance during a live inspection Post-Inspection Follow-Up: Support responding to any findings or compliance orders This proactive audit protects SMEs from risk, disruption and penalties and provides peace of mind heading into 2026. Prepare Now, Avoid Pressure Later We are observing instances where a WRC inspection coincides with an employer having a live or upcoming WRC complaint listed for hearing. While this does not indicate any direct link between the two processes, it highlights an important practical point for employers: if you have a pending WRC case, it is prudent to ensure that all employment records, contracts, policies and statutory documentation are fully up to date and compliant. A scheduled hearing can often prompt an employer to review their practices, but by that stage it may be too late to correct underlying non-compliance identified during an inspection. Taking proactive steps early can significantly reduce risk and demonstrate good faith if those records become relevant in any subsequent proceedings. December and January is an ideal time for employers, particularly SMEs, to review compliance, update records and identify any gaps as the new year begins. Preparing now ensures you are fully inspection-ready for 2026. If you would like support preparing for a WRC inspection or wish to arrange a pre-inspection audit, our HR Partners are ready to assist. info@mssthehrpeople.ie , Ph: +353 1 887 0690, www.mssthehrpeople.ie
What Employers Need to Do Before Year End
A Warning for Employers and the Importance of Compliance
With effect from on 1 st January 2026, the national minimum hourly rate will become €14.15. The full rate applies to any employee who is at least 20 years of age except as detailed below; EMPLOYEE MINIMUM HOURLY RATE Aged 20 or more - €14.15 (100%) Aged 19 - €12.735 (90%) Aged 18 - €11.32 (80%) Aged under 18 - €9.905 (70%) Who does it not apply to? The National Minimum Wage rate does not apply to the remuneration of a person who is; The spouse, father, mother, grandfather, step-father, step-mother, son, daughter, step-son, step-daughter, grandson, grand-daughter, brother, sister, half-brother or half-sister of an employer, employed by the employer, or A craft apprentice within the meaning of or under the Industrial Training Act, 1967, or the Labour Services Act, 1987. Alternative minimum rates may be set down under Sectoral Employment Agreements (SEAs) or created by Employment Regulation Orders - Workplace Relations Commission . Working Hours Full time, part time, temporary, casual or seasonable employees are all entitled to the National Minimum Wage for hours worked. Calculation of Hourly Pay (Reckonable Pay) Reckonable pay means payments that are allowable in calculating an average hourly rate of pay under the National Minimum Wage Act. The following payments may be taken into account when determining average hourly rate of pay. Basic Pay Shift Premium Piece/Incentive Rate. Commission Any payments under section 18 of the Organisation of Working Time Act, 1997 (zero-hour protection) Productivity-related bonuses Service charge paid through payroll Board of Lodgings- If you receive board or lodgings, that is food or accommodation from your employer, the maximum amounts that can be included from 1 January 2026 are for: - - board only €1.27 per hour worked - accommodation only €33.42 per week or €4.77 per day Non- Reckonable Pay The following payments cannot be included to make up the national minimum wage rate: Overtime, call-out premiums, service pay, weekend and public holiday premiums, expenses incurred by the employee in carrying out their employment, unsociable hours premiums, tips or gratuities paid through the payroll, and allowances for special or additional duties may not be included, benefit in kind payments (except board of lodging), payments while absent from work i.e. sick pay, pension contributions, redundancy payments, compensation for injury, employer loan, an advance on wage/ salary, any sum payable to an employee in lieu of notice of termination of employment. Pay Reference Period The period over which you may calculate the average earnings (Pay Reference Period) may be a week, or a fortnight but must not be longer than one month. Employers are obliged to advise employees of the pay reference period they are selecting for calculations of minimum pay. Employees must be notified in writing as part of their Terms and Conditions of Employment. An employee may request from his or her employer a written statement of the employee's average hourly rate of pay for any pay reference period (other than the employee's current pay reference period) falling within the 12-month period immediately preceding the request. Employee Complaints An employee may make a complaint to the Workplace Relations Commission to investigate allegations of failure by the employer to pay the National Minimum wage or victimisation of an Employee. Such a referral must be within 6 months from the date of receipt of a written statement or from the latest date the employer should have given a written statement. Employees may not refer a complaint before requesting a written statement from their employer. Steps for Employers Employers should now implement the required changes to the rate of pay for those who are currently earning less than the new National Minimum Wage. There is no automatic right of an increase to those who are already earning in excess of the minimum wage. However, it is likely that some employers may face requests for the same. Whilst ordinarily there is no need for an Employer to notify an Employee that the National Minimum has been increased, some employers choose to issue a letter confirming their new rate of pay and the date on which it will be reflected in their pay. A template for this letter can be found on our HR Hub. Minimum Wage in Review With this most recent increase in the National Minimum Wage, an employee on minimum wage who works a full 39-hour week will now receive an additional €40.90 per week, or an extra €2,129.40 gross per year. It remains to be seen how employers will cope with these increases. As the new National Minimum Wage rate takes effect from 1 st January 2026, employers should take the time to review their current pay structures, budgets, and payroll systems to ensure full compliance. Staying proactive and informed will help employers manage these adjustments smoothly and maintain positive employee relations in an evolving pay landscape. If you require any assistance in reviewing pay structures, updating employment contracts, or ensuring full compliance with the new National Minimum Wage obligations, our team is here to help. You can contact MSS The HR People on 01 8870690 or email info@mssthehrpeople.ie and we will be happy to support you.
