Draft bill implementing the EU Pay Transparency Directive published for public consultation
If the proposed bill is adopted in its current form, it will enter into force on 1 January 2027. We are hosting an HR seminar in Plesner on 18 March 2026 and 15 April 2026 (in Danish), where we will elaborate on the proposed bill and how employers can begin preparing now to be compliant with the new requirements. There are still available spots for our HR seminar on 15 April 2026, which you can sign up for here.
The purpose of the Pay Transparency Directive is to strengthen the application of the already existing principle of equal pay for men and women for the same work or work of equal value through pay transparency and strengthened enforcement mechanisms. Importantly, the bill implementing the Pay Transparency Directive does not aim to interfere with wage formation in the Danish labour market.
The proposed bill applies to all employers in both the public and private sectors, to all employees with an employment contract or employment relationship, and - to some extent - to job applicants.
The key changes to employers' obligations introduced with the proposed bill are:
- Mandatory pay structures
- Obligations in the recruitment process
- Employee access to pay information and criteria
- Pay reporting obligations
- Shift in the burden of proof
Mandatory pay structures based on objective, gender-neutral criteria
One of the most fundamental changes is the requirement for all employers to apply formalized pay structures that ensure equal pay for men and women for the same work or work of equal value.
The pay structures must enable an assessment of whether employees are in a comparable situation with regard to the value of their work, based on objective, gender-neutral criteria agreed with the employee representative, if one exists. The criteria must include skills, effort, responsibility and working conditions and, if relevant, any other factors relevant to the specific job or position and must be applied in a manner that excludes any form of direct or indirect discrimination based on gender.
Importantly, the concept of pay structures does not determine pay levels but serves to enable a comparison based on objective and gender-neutral criteria.
New obligations during the recruitment process
The proposed bill introduces new obligations for employers in the recruitment process. Prior to interview, the prospective employer must inform job applicants of the starting salary or salary range for the position, based on objective, gender-neutral criteria, as well as any relevant collective bargaining agreement provisions. The employer has methodological freedom as to how this information is provided, but the obligation applies to all positions intended to be filled, including those filled through direct approaches or headhunting.
In addition, employers are prohibited from asking applicants about their pay history in current or previous employment. However, the proposed bill does not prevent an employer from asking what the applicant expects to receive in pay, provided the employer has already disclosed the starting salary or pay range.
Employee access to pay information and criteria
Under the proposed bill, every employer must make it easy for employees to access the objective and gender-neutral criteria used to determine their pay, pay levels, and pay progression. In addition, each employee has the right to request information about their individual pay level and the average pay levels, broken down by gender, for the category of employees performing the same work or work of equal value. Employers must inform all employees once a year of this right.
The employer must provide the requested information in writing no later than two months after the request is submitted. An employer may require that employees use the information solely to exercise their own right to equal pay, except for information about the employee's own pay or pay level, which the employee is free to disclose to others at their own discretion.
Pay reporting obligations
Employers with at least 100 employees must prepare pay reports for the preceding year covering the gender pay gap in each category of employees, broken down by ordinary base pay and supplementary or variable elements. The frequency of reporting depends on the size of the company, as set out below. Employers with between 50-99 employees must also prepare a report subject to certain conditions.
The information must be made available to employees and employee representatives, and the report must also be submitted to the Labour Market Institute for Equal Pay (in Danish: "Arbejdsmarkedets Institut for Ligeløn"). The employer must respond to questions regarding clarification of data (including questions from the Labour Market Institute for Equal Pay) within two months. Statistics Denmark (in Danish: "Danmarks Statistik") or an employer organization, if the company is a member of one, will free of charge produce such pay report on behalf of the employer based on existing pay data submissions. However, the DISCO-code based categorization used by Statistics Denmark will often not be sufficient to meet the requirements for the pay report under the proposed bill, as it only captures employees performing the same job function, not work of equal value. Employers are therefore expected to need to supplement with their own categorization.
Where a pay report reveals an unjustified gender pay gap of at least 5% in a given employee category that is not justified by objective, gender-neutral criteria and not remedied within six months, the employer must conduct a joint pay assessment in cooperation with employee representatives. The assessment must analyze pay differences, identify causes, and include measures to remedy unjustified differences.
Shift in the burden of proof
One of the most significant aspects is the proposed shift in the burden of proof. If an employer has failed to fulfil its obligations under the new transparency provisions, factual circumstances giving rise to a presumption of discrimination will be deemed established. The burden of proof then shifts to the employer, who must demonstrate that no discrimination has taken place. This presumption does not apply if the employer can prove that the non-compliance was unintentional and of minor significance.
Our remarks
The EU Member States' deadline for implementing the Pay Transparency Directive is 7 June 2026. It has therefore been uncertain whether a bill on this matter would have retroactive effect from 1 January 2026. It is therefore very positive for Danish companies that the proposed bill provides that the new requirements will only take effect from 1 January 2027.
The proposed bill is drafted as a minimum implementation of the Pay Transparency Directive. We therefore recommend that employers begin preparing to comply with the obligations set out in the proposed bill. It is our expectation that the bill will still constitute a minimum implementation once it has been considered and finally adopted. However, it cannot be ruled out that additional obligations for companies may be introduced in the finally adopted act.
The proposed bill has now been submitted for public consultation, which ends on 27 March 2026, a few days after the ongoing parliamentary election. We expect that the parliamentary consideration of the proposed bill will commence shortly after the formation of the new Danish government.
Our employment law team is closely monitoring developments and is available to advise on all aspects of the proposed bill and its implications for your organization. Please do not hesitate to contact us.