As the EU Equal Pay Directive moves closer to full implementation, companies operating in Luxembourg and across Europe must begin preparing today—not just to comply, but to stay competitive in the talent market of tomorrow.
What are the main provisions of the Directive?
1. Companies in Luxembourg with 100 or more employees will be required to publicly disclose detailed pay related statistics by gender, both on fix and variable pay. The following information has to be provided:
a) the gender pay gap;
b) the gender pay gap in complementary or variable components;
c) the median gender pay gap;
d) the median gender pay gap in complementary or variable components;
e) the proportion of female and male workers receiving complementary or variable components;
f) the proportion of female and male workers in each quartile pay band;
g) the gender pay gap between workers by category of workers broken down by ordinary basic wage or salary and complementary or variable components.
2. Any employer with a gender pay gap of 5% or higher, in any category of jobs of equal value which cannot be justified by objective, gender neutral criteria and which is not addressed within 6 months, will have to undergo a joint pay assessment with social partners.
3. Employees have the right to receive precise information on how they compare to workers of the other gender in their category.
4. Employees cannot be restricted from discussing their own pay with colleagues
5. Candidates must be proactively (not merely on request) provided with initial proposed salary or salary range latest before their interview
At VISTIM, we help businesses turn compliance into a strategic opportunity. Here are 10 areas we recommend organisations address to prepare effectively:
1. Bridge your strategic reward philosophy with regulatory compliance – align fairness and business goals.
2. Design a reward policy that maintains performance incentives while meeting transparency standards.
3. Upskill your stakeholders – from HR to managers to staff delegation – on the new expectations and processes.
4. Define reward criteria that are compliant, business-relevant, and flexible enough to prevent unintended behaviours.
5. Develop a solid job architecture with comprehensive categorisation and clear job descriptions.
6. Establish robust data and reporting processes to meet transparency and audit requirements.
7. Set clear performance expectations and ensure they are consistently evaluated and documented.
8. Document the rationale behind all reward decisions – and ensure your HRIS or digital tools can support this.
9. Identify and address unjustified pay gaps in time to meet the 2027 compliance deadline.
10. Plan for your employer brand – candidates will be reviewing your gender pay gap data when applying.
Need guidance or a tailored readiness assessment? Let’s talk. We can help you prepare thoughtfully, thoroughly, and strategically.