Although the Labour Code already clearly states that all employees of an employer are entitled to equal pay for equal work or work of equal value, the reality is not so rosy. According to a report by the Czech Statistical Office in 2023, the gender pay gap is still over 17 %, although direct discrimination is not always the reason for the difference. The EU-wide average is at 13 % and the World Economic Forum predicts that it would take another 133 years for the gender pay gap to disappear. The European Union does not want to wait that long and has taken up the fight for fairer pay. The Pay Transparency Directive has been in force since 2023 and we should implement it in the Czech Republic within 3 years. Enough time? Only at first glance.
Women are also mothers, so the main reason why inequalities occur is because of their career breaks. Although this is improving, men are still not rushing into care. Because of motherhood, 91% of women interrupt their careers and when they return to work, they look for part-time jobs, unfortunately with lower pay. Women are much more likely than men to work in lower paid jobs and 65 % of management positions are filled by men. Societally entrenched gender stereotypes, such as the traditional distribution of roles in families and women's lower self-confidence in negotiating better terms, also play a role.
Overcoming differences in treatment and pay requires, first and foremost, a change in mindset, which can only be accelerated by a legal framework. The EU Pay Transparency Directive aims to reduce the pay gap between people in similar positions.Companies will have to set objective criteria for the pay of their employees and ensure that they pay women and men in similar positions equally.
Do you know that the directive will affect you and do you want to get to know it in detail? Let's set up a meeting ↗ and look at it together.
Further obligations on employers will be graded according to the size of the company. Companies with more than 100 employees will be obliged to regularly report gender pay gap data to the authorities. Large employers with over 250 employees must submit their first report by June 2027 and annually thereafter, while smaller firms (150 to 249 employees) report data every three years. Firms with 100 to 149 employees have until 2031 to make their first report. In addition, they must report some information directly to their employees, even going back four years (if they have the data).
If the report reveals an unjustifiable wage gap of more than 5 %, the employer must arrange a remedy within 6 months. In larger companies with more than 100 employees, this may lead to a joint pay assessment process, where the aim is to analyse the current situation, identify the gender pay gap and remedy it according to the findings. All this with the participation of employee (union) representatives.
Time is running out. Even though we have two years to go, companies should start preparing for a change now. It's time to review and adjust (or set up) internal wage rules to make them transparent and objective. In practice, this means creating detailed job descriptions, defining competency models and roles, and setting clear requirements for individual positions. It is also important to review employment contracts and other documents to ensure that they are in line with the new rules (e.g. whether the information documents for employment contracts with more detailed job descriptions actually correspond to reality, etc.).
Companies that want to avoid problems should already conduct a pay equity analysis and, where appropriate, focus on eliminating inequalities where they exist. This will avoid potential sanctions and litigation that could arise once the rules of the Directive kick in.
The Directive strengthens employees' rights to compensation if they have been discriminated against because of their pay. Therefore, employees may be able to claim additional pay differentials, possibly retrospectively, if the company cannot clearly and objectively explain the differences. Companies have the last two years to adjust their budgets and, if necessary, to regularise these differences. And that's why we recommend getting started - you may be creating 2026 pay budgets as early as next year, let alone 2025.
We will review and amend your employment documentation and internal regulations ↗ to comply with the EU Pay Transparency Directive.
The Directive will lead to greater transparency and equality. It is expected that employees will have better access to information and that employers will have to provide an explanation in the event of suspected discrimination. As a result, this will help to improve the working atmosphere, strengthen employee loyalty and bring a better climate into companies. Companies that adapt early will have a competitive advantage not only in attracting new talent but also in the stability of their team. In addition to redressing gender inequalities, we believe that over time the Directive may also contribute to eliminating discrimination against other groups, such as the elderly, ethnic minorities or people struggling with physical disabilities.
The legislation of the Member States that deal with this issue are unaffected by the European Directive, but it does, however, work with division between men and women. In our environment, we will follow the Czech legislation (what is stated in the ID card).
The Directive addresses the problem of unequal pay for employees doing the same job. Differentiation between specific workers in the same position is of course possible if they perform differently in terms of other criteria mentioned directly in the Labour Code (e.g. strenuous work, complexity of tasks, level of responsibility, working regimes, etc.). However, the rules are not meant to be circumvented.
No, the directive only states that the employee has the right to know how much employees in the same position as him or herself earn on average, with the employer having to divide this information between men and women (i.e. the average income of men in the position and the average income of women). The Directive also assumes that any handling of personal data (which includes pay data) is subject to the GDPR rules.
Do you want to be prepared to avoid shock, deterioration of interpersonal relations and unpleasant explanations in your company? We'll advise you on the best way and how best to step in early. Write us ↗.
Even though you will have some administrative work, setting up and communicating with employees with the incoming Directive, think of it as a challenge, not a threat. Time is running out and you can already take the first steps. We can help you adjust your employment documentation and set up a fair pay system so that you are as prepared as possible for the new rules.
Jako advokát se specializuji na pracovní právo. Klientům pomáhám hlavně v oblastech nastavování pracovní dokumentace, rozvazování pracovněprávních vztahů, správních kontrol nebo správného nastavení spolupráce s kontraktory.
