EU pay transparency: what it means for employers
The EU pay transparency directive (Directive (EU) 2023/970), which must be implemented by June 2026, will change how pay is handled and communicated across member states – including Sweden.
For employers, this means moving from “we are roughly fair” to documented, provable pay transparency. Recruitment, salary structures, HR routines and leadership decisions all need to support that.
As a recruitment partner, we focus on the practical side: clear salary ranges, structured offer criteria, and recruitment processes that support compliance rather than work against it.
Key changes at a glance
Salary ranges in job ads
Employers must provide the expected salary or salary range before interviews start – typically in the job ad or at the latest in the earliest contact. Vague “competitive salary” language, without a real range behind it, will not be enough.
No questions about pay history
Companies may no longer ask candidates about their previous salary or use pay history as a basis for offers. The focus needs to shift to the role, responsibilities and market data instead.
Right to information for employees
Employees gain the right to request information about:
- their own pay level, and
- average pay levels for workers doing the same or equivalent work, broken down by gender.
This pushes employers to know – and be able to explain – how similar roles are paid. The focus is on pay differences between women and men in the same or equivalent roles. The main comparison is between women and men doing the same or equivalent work, not between every individual role in the company.
Regular pay audits for larger employers
- Employers with 250+ employees: annual pay audits.
- Employers with 100–249 employees: audits every three years, with the first due by 2031.
These audits will highlight structural pay gaps that need to be analysed and, where necessary, corrected.
Correction of unjustified pay gaps
If there is an unexplained gap of more than 5% between women and men in comparable roles, the employer must investigate and correct it within a set period. It will not be enough to simply acknowledge that a gap exists.
Reporting to authorities
Larger employers must report pay data to the Swedish Equality Ombudsman (DO), with parts of the information made publicly accessible. Pay structures will be more visible to employees, unions and candidates.
For further legal detail, you can refer to:
- KPMG’s overview of the EU pay transparency directive
- PwC's overview of the EU pay transparency directive
- Analyses from firms such as Ogletree Deakins, Eversheds Sutherland and Setterwalls
Why this matters for companies in Sweden
For organisations in Sweden – and for international companies with teams here – the directive has implications on several levels.
Compliance and legal risk
Non‑compliance can lead to:
- fines and compensation claims,
- legal disputes and pressure from unions or employee groups,
- exclusion from certain public procurement opportunities.
Having clear, documented structures reduces both risk and stress.
Talent and employer brand
Candidates are increasingly asking about pay fairness and transparency. Structured, open practices are becoming a deciding factor in competitive recruitment, especially for experienced professionals and international talent.
Cultural alignment
Sweden already has strong norms around equality and openness. The directive pushes companies – particularly international groups – to align their global practices with Swedish expectations on gender equality and fair pay.
How the directive affects recruitment in practice
From a recruitment perspective, some everyday routines need to change, but they don’t have to be complicated.
Job ads and early conversations
Salary ranges or pay bands need to be defined before a role goes live. Job ads and first contacts should give candidates a realistic view of pay, not just “competitive salary” without substance behind it. That means agreeing on the range internally in advance and being prepared to share it early.
Interviews and offer discussions
Standard questions about current or previous salary will no longer be allowed. Instead, recruiters and hiring managers need to focus on:
- salary expectations,
- the scope and responsibility of the role, and
- market benchmarks and internal pay structure.
Offers then need to sit within an agreed band for comparable roles. If you make an exception, you should have a clear, documented reason that will still make sense during a future audit.
Different markets, consistent logic
For companies working across several countries (for example, Sweden and the Netherlands), differences in pay must be based on role content, local market data and responsibility – not on “what we can get away with in this market”. This is where recruitment, HR and finance need a shared logic for levels and pay bands.
How we support clients as a recruitment partner
We’re not legal or compensation consultants, but we stay up to date on market trends and the parts of the EU pay transparency directive that affect recruitment. Our focus is to:
- work with clear, agreed salary ranges for the roles we recruit for,
- make sure job ads, early conversations and offers are transparent and consistent,
- Advice on how to talk about salary and fairness with candidates in a way that supports both compliance and a good candidate experience.
For detailed legal or pay structure questions, we recommend working together with HR, legal and compensation experts. If you don’t have that function in‑house, we can help you find the right external partners while we support the recruitment side.
Turning regulation into an advantage
The EU pay transparency directive is more than a legal requirement. It is an opportunity to make your pay practices clearer, fairer and easier to explain – to employees, candidates and stakeholders.
If you want to turn these new rules into a competitive advantage, we can support you in aligning your recruitment, salary ranges and communication with the upcoming requirements.
You are welcome to book a meeting with the Beyondo team to discuss where you are today and what a realistic roadmap could look like or
Download our Ultimate guide to recruitment.
Key external resources
For more background, you can read:
- Overviews of the EU pay transparency directive from KPMG and Ogletree Deakins
- Information on Sweden’s implementation work (SOU 2024:40) and commentary from firms such as Eversheds Sutherland and Setterwalls
- Figures’ guide to pay transparency in Sweden for a compensation and data perspective
