Transparent remuneration

 

What obligations will the Transparent Remuneration Directive bring and why companies should not wait for the final Czech legislation to prepare 

Why the biggest obstacle to implementing transparent remuneration is poor data, unclear roles and a lack of a grading system 

How to prepare for the new requirements in the field of gender pay gap reporting and the defensibility of the pay gap 

The deadline by which EU Member States were supposed to transpose the Pay Transparency Directive has already passed. The Directive set a deadline of 7 June 2026 and aims to strengthen the application of the principle of equal pay between women and men for equal work or work of equal value through greater transparency and more effective enforcement mechanisms. Some countries are significantly further along in their implementation – for example, Slovakia has adopted the Equal Pay Act with effect from June 2026. The obligations arising from the directive include setting up a remuneration system, publishing reports with average remuneration for the company and individual grades, and defending the pay gap between men and women of more than 5%. 

Although the final law has not yet been approved in the Czech Republic, we know the draft Czech legislation and the basic direction is already quite clear. Therefore, we do not recommend companies to wait with the preparation. The national regulation must be based on the Directive and, according to current information, no postponement of transposition obligations at the EU level is envisaged. Employers should therefore take into account that the first obligations may be effective as early as 1 January 2027. 

Our experience with clients shows that now is the high time to start. Transparent remuneration is not just a legal regulation of an internal directive. In practice, it is a complex project that connects HR, legal team, management and often IT. Companies need to know what positions they have, how they are classified, according to what criteria they are evaluated and whether the salary bands, bonuses and benefits correspond to this.  

The most common problem is not only the gender pay gap analysis itself, but also the quality of the input data and the structure of job positions. For many employers, the data is not sufficiently structured, is not available in one place, or does not allow for a reliable comparison of employees performing the same work or work of equal value. 

Another problematic step is to group positions into individual grades or categories. In practice, it turns out that some positions are not sufficiently differentiated according to seniority, responsibility or real work demand, while others, on the contrary, are historically divided in too much detail without clear logic. 

Therefore, it is often necessary to update job descriptions, unify role titles, fill in missing responsibilities and set objective criteria for classifying positions into appropriate levels. In some cases, there will also be a need to revise the remuneration of specific employees, especially if the pay gap is not based on demonstrable and gender-neutral reasons. An important step can also be to set up or refine the monitoring of individual performance, so that any differences in wages can be defended not only formally, but also substantively. 

It is in these areas that we help clients most often – from the initial assessment of readiness through the revision of data and job positions to the proposal of gradation, setting objective criteria and identifying risk differences in remuneration. Thanks to the combination of legal and HR perspectives, we can show companies not only where they have a potential discrepancy, but above all how to solve it practically and defensively. 

Therefore, waiting for the final wording of the law is not a safe strategy. Companies that start early will have the space to clean up the data, formalize the remuneration system, eliminate obvious inconsistencies, and prepare managers for a new level of reward communication. Transparency will not only be about reporting. It will also be about the employer's ability to credibly explain why a particular remuneration is set the way it is – not only to the supervisory authorities, but also to the employees who will be actively interested in this information.