WHAT THE NEW WAGE TRANSPARENCY ACTUALLY CHANGES

8. July 2026

Even before the EU Pay Transparency Directive has been transposed into national law, there’s already a stir: Is a bureaucratic monster looming? Will everyone soon know what others earn? In GEWINN, Nicolaus Mels-Colloredo and Brigitte Zweng explain what the reality is and how companies should prepare.

When Labor Minister Korinna Schumann submitted a draft bill to implement the EU Pay Transparency Directive to the government’s internal coordination body, there was a great deal of commotion. It was June 7, the day the three-year implementation period expired, during which the social partners had failed to reach an agreement. There was talk of soon having thousands of forms, and some feared that before long, every coworker would know how much everyone else earned.

But first, let’s look at the starting point. On average across the EU (EU-27), the so-called gender pay gap stood at 11.1 percent in 2024, and in Austria it was as high as 17.6 percent. That’s how much less women earn gross per hour than men, explains attorney Anna Mertinz, a partner at KWR. Since this gap has barely narrowed over the years, the EU directive aims to help achieve equal pay for equal or equivalent work, regardless of gender. “Three years ago, all EU countries, including Austria, co-adopted the directive,” emphasizes attorney Nicolaus Mels-Colloredo, a partner at PHH, “the law needs to be enacted.”

But can’t employees already file a lawsuit today if they are discriminated against? In fact, gender-based discrimination—including when it comes to pay—has long been prohibited under the Equal Treatment Act (GlBG). If an employee wins the case, they are entitled to demand retroactive payment of the difference for the past three years, as well as compensation for the personal harm suffered. However, as the Equal Treatment Ombudsman points out, such lawsuits have often failed from the outset due to a lack of transparency. This is because a female employee who suspects she is being paid less has virtually no way of finding out how others are compensated.

In the future, however, courts will be able to order the disclosure of evidence, even if it contains confidential information. In addition, a complete reversal of the burden of proof in favor of the employee will be introduced in court cases if the employer fails to comply with the disclosure obligations set forth in the directive.

He negotiated better

One more thing: If a female employee discovers that she earns 1,000 euros less than a male colleague, and her boss responds by saying that he simply negotiated a better deal, the employer won’t get away with it even now, as labor law expert Mels-Colloredo makes clear. “Negotiating better” does not constitute a valid justification for pay disparities, as the Supreme Court of Austria (OGH) already ruled in 1998.

Objective Evaluation

Most companies—including smaller ones—face the greatest amount of work when it comes to job descriptions. According to the directive, in order to more clearly comply with the principle of equal pay for equal or equivalent work, employers must evaluate their jobs based on objective, gender-neutral criteria. “This must include the required skills, the associated responsibilities, the stress involved, and the working conditions,” explains Elisabeth Plese, an attorney at KWR. To date, many companies do not have job descriptions at all. Furthermore, work-related stress is rarely taken into account, and social skills often still play no role. “Of course, there will be room for interpretation in the evaluation process, but it is important that these criteria are established transparently and in compliance with the directive for the entire company,” adds Mertinz. With regard to pay development, factors such as individual performance, skill development, and length of service must also be taken into account.

“Our recommendation to employers is: Can you provide a convincing explanation for the differences, or not?” said Brigitte Zwang, a law clerk at PHH, “because the goal is simply to eliminate systematic discrimination. If, on the other hand, one candidate has ten more years of experience or brings certain additional skills to the table, it’s naturally possible to pay them more in the future as well.”

How much do my coworkers make?

Is it true that in the future, employees will be able to find out their colleagues’ salaries? “No, because the right to information applies only to individual pay levels and the average pay level of the comparison group, broken down by gender,” says KWR labor law expert Plese, “and this includes not only salary but also allowances, bonuses, benefits, etc.” The employer has a maximum of two months from the date of the request to provide the information. Even in smaller companies, an employee may request information once a year regarding their own pay assessment and that of the comparable group.

What if there were only one man in the group and that’s how you found out his salary? “He is protected from this; instead of learning his salary, the woman making the inquiry would be referred to the employee representative body—such as the works council or the Equal Treatment Ombudsman’s Office—to seek advice,” explains Plese. “The lower limit for a group is a data protection violation. There is no upper limit on size,” adds Thomas Neumann, Head of Tax Consulting at BDO. For this reason, companies also have some leeway to tailor groups in light of the looming gender pay gap.

So even if you still don’t receive salary information about individual colleagues, you can at least find out the average for your department. “This could lead to some unrest in the workplace, since we don’t have a tradition of being transparent about salary information in Austria. That’s why good internal communication is recommended to address the issue,” advises Neumann.

What if there are pay disparities that cannot be objectively justified? Do higher-earners have to fear pay cuts? “No, neither the directive nor Austrian law allows for that,” Mels-Colloredo reassures us.

Clarity in Job Applications

The hiring process will also become more transparent: “In the future, employers must actively provide information about starting salaries or salary ranges,” explains Mertinz. In addition, employers may still ask about salary expectations. “However, they may not ask what someone earns, or even demand to see their pay stub,” says Mertinz. Here, too, it is advisable for employers to document the selection criteria in the hiring process in writing. Furthermore, it will be prohibited in the future to include salary confidentiality clauses in employment contracts.

A bureaucratic monster?

Is this really a huge bureaucratic burden for companies? “It will depend a great deal on how well a company has organized its personnel data so far. If the data has already been recorded electronically—such as personnel files and collective bargaining agreement classifications—the effort involved won’t be significant,” estimates BDO expert Neumann. On the other hand, companies that haven’t properly maintained their personnel data so far, don’t have anything in digital form yet, and have to start from scratch will have significantly more work to do. His advice: This is exactly what you should start preparing now, even before the implementing law is passed in Austria, because you’re definitely going to need it.

Reporting Requirements: Only for Companies with 100 or More Employees

Under the Equal Treatment Act, salary reports to the works council have so far been mandatory for companies with at least 150 employees. The new reporting requirement implementing the directive—as much as is already known from the domestic draft legislation—applies to companies with 100 or more employees; “the report itself will have to be somewhat more comprehensive than has been customary to date,” says attorney Nicolaus Mels-Colloredo, a partner at PHH. In the future, this will also require reporting on hidden components such as premiums, bonuses, and allowances. For companies with up to 149 employees, a report is required only once every three years, beginning in 2031. For companies with 150 to 249 employees, a pay report is required every three years, starting in 2027, and only for companies with more than 250 employees will an annual report be required starting in 2027. If such a report reveals a gender-specific pay gap of at least five percent within a group of employees that cannot be objectively justified, a so-called joint pay assessment must be conducted with the assistance of employee representatives; a national equal treatment agency may also provide support. The extent to which administrative penalties can be imposed on companies that fail to take action remains unclear at this time, as the legislation has not yet been enacted.