EU Pay Transparency Directive: Impact on Czech Employers

Tým P&T Europe Services 4/8/2026 10 min

EU Directive 2023/970 on pay transparency must be transposed into Czech law by June 7, 2026. What it means for employers and how to prepare.

Table of Contents

Directive (EU) 2023/970 of the European Parliament and of the Council on pay transparency represents a fundamental change in employee remuneration. The Czech Republic must transpose this directive into national law by June 7, 2026.

Czech Draft Law

Update as of 26 October 2026: the government approved the bill on 31 August 2026 and it is in the Chamber of Deputies as parliamentary print 300 (first reading on 20 October 2026, now in committees). We have updated the points below to match the government bill. For the current status and details see Pay transparency and What is being prepared for 2027 in labour law and payroll. The Ministry of Labour and Social Affairs has prepared a draft amendment to the Labor Code implementing the directive's requirements. Key points:

Core provisions are set to take effect from January 1, 2027
Pay gap reporting obligations and related enforcement powers commence from January 1, 2028
First reports are expected to cover 2027 data and be submitted during 2028

Transparency in the Recruitment Process

Employers will be required to:

Demonstrably inform candidates of the minimum pay and other benefits, e.g. in the job ad, during the selection process or when signing the contract, at the latest before the employment relationship starts (under the government bill)
Not ask candidates about their previous salary
Base remuneration decisions exclusively on objective criteria related to the position

This rule applies to all employers regardless of size.

Employees' Right to Information

Employees have the right to request information about:

Their individual pay level
Average pay levels of employees performing the same work, broken down by gender
The employer must respond no later than two months from the request

Important: under the directive (Article 7(5)), workers may not be prevented from disclosing their pay for the purpose of enforcing equal pay.

Mandatory Remuneration System

Every employer must establish and document a remuneration system via internal regulation or collective agreement. The system must:

Classify all job positions into groups graded by work value
Use gender-neutral evaluation criteria
Criteria under the Czech draft: complexity, responsibility, difficulty, and working conditions

Gender Pay Gap Reporting

Reporting obligations are introduced gradually:

Employers with 250+ employees – annual reporting
Employers with 100–249 employees – reporting once every three years
First reporting under the government bill: from 2028 for employers with 150 or more employees, from 2031 for employers with 100–149 employees

If reporting reveals a pay gap between men and women exceeding 5% that is not objectively justifiable, the employer must conduct a joint pay assessment.

Shift in the Burden of Proof

One of the most significant changes is shifting the burden of proof to the employer. If an employee presents facts suggesting discrimination, the employer must prove that no discrimination occurred. Czech courts have already ruled that regional differences in living costs cannot justify pay differentials for equal work at the same employer.

Sanctions and Risks

Fines from the Labor Inspection for violations of equal treatment obligations
Civil lawsuits by employees for back-payment of wage differences and compensation for non-material damage
Potential impact on public procurement – the directive requires tender participants to comply with equal pay rules
Reputational risks from disclosure of discriminatory pay practices

How to Prepare

1. Conduct an internal pay audit – map pay differences in comparable positions 2. Formalize the remuneration system – create internal pay regulations with clear job classification 3. Update recruitment processes – prepare salary ranges for all positions, remove questions about previous salary 4. Review confidentiality clauses – the directive does not allow preventing employees from disclosing their pay for equal-pay purposes 5. Train managers – teach them to justify pay based on objective criteria 6. Prepare data infrastructure – ensure the ability to generate gender pay gap reports

Legal Notice

This article is for informational purposes only and does not replace professional legal or tax advice. Information is processed according to Czech law valid at the date of publication. We always recommend consultation with an expert for specific situations.

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TPES

Tým P&T Europe Services

Specialists in payroll accounting, HR and accounting