Pay transparency directive from 2026: what will it mean for employers?

Many companies have a remuneration practice. Not all have a remuneration logic.

By 7 June 2026, Lithuania must implement the EU Pay Transparency Directive.

1. Pay system and job classification

🔹 The remuneration system will be established either by a collective agreement or by the employer following consultations with employees.

🔹 Positions must be classified based on objective, gender-neutral criteria: skills, qualifications, effort, responsibility and working conditions.
Work of equal value must be assigned to the same job categories.

🔹 Employees will be allowed to disclose their salary information for the purpose of enforcing the principle of equal pay. Such disclosure will not be considered a breach of confidentiality.

2. Transparency in recruitment

🔹 Article 5 of the Directive requires employers to provide candidates with information on the initial salary or salary range before concluding an employment contract.

🔹 Employers will also be prohibited from asking about a candidate’s previous salary.

This means that common recruitment practices based on negotiating “from the previous salary” will need to be fundamentally revised.

3. Information rights of employees

Employers will be required to:

🔹 inform employees annually about their right to request information on their individual pay level and the average pay level by gender for workers performing the same work or work of equal value;

🔹 respond to such requests within a reasonable period (and within two months in complex cases).

Where disclosure would allow the identification of an individual employee, information may only be provided to employee representatives or competent authorities.

Employees may not be restricted from disclosing their pay where this is done to enforce the principle of equal pay.

4. Reporting obligations and the 5% threshold

Employers will be required to submit monthly data to social security authorities on employees’ (excluding temporary agency workers) remuneration and working time.

The frequency of public reporting will depend on company size:

• Companies with 250 or more employees must report annually and publish the results.

• Companies with 100–249 employees must report every three years.

Where a gender pay gap of at least 5% is identified within a job category and cannot be justified by objective criteria — and is not remedied within six months — a joint pay assessment involving employee representatives will become mandatory.

5. Obligation to justify and burden of proof

If questions arise regarding pay differences, employers must provide a detailed explanation to employee representatives within one month.

Where the difference cannot be justified on objective grounds, the employer must, in cooperation with employee representatives, remedy the situation within six months.

Now is the right time to systematically review your remuneration logic, job classification structure and internal documentation — and to assess whether your organisation is prepared for the new transparency and accountability standards.

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