In 2023, the EU adopted the much-discussed Pay Transparency Directive for its member states. The time has come to introduce the directive in Norway, and businesses should start preparing now.
The aim of the Pay Transparency Directive is to close the gender pay gap. The directive aims to strengthen the principle of equal pay through greater pay transparency and the introduction of more enforcement mechanisms. The deadline for implementation of the directive in Norway is 7 June 2026, with the first reporting obligations beginning in June 2027.
We already have requirements for activity and reporting obligations in companies to prevent discrimination and promote equality through the Equality and Anti-Discrimination Act. The EU's new regulations will significantly tighten the requirements for routines and reporting obligations on pay and working conditions.
More specifically, the directive will impose the following requirements on employers:
- Define what constitutes equal pay for equal work or work of equal value based on objective criteria such as competence, responsibility, effort, and working conditions.
- Increase pay transparency by providing information about pay differences between genders within the same job category, as well as the criteria used to determine pay, pay levels, and pay increases. This requirement also covers variable salary components such as bonuses and other supplements.
- Provide salary information in recruitment processes and refrain from asking about applicants' previous salaries, as this will no longer be permitted.
- Meet reporting obligations to the authorities, where the scope of these obligations varies based on the number of employees in the organization.
- For employers with 100-149 employees, the first report must be submitted in 2031, and then updated every three years.
- For employers with 150-249 employees, the report must be submitted in 2027 and then updated every three years.
- For employers with 250 or more employees, the report must be submitted in 2027 and then updated every year.
- Prepare for potential sanctions in cases of non-compliance with reporting requirements and violations of the equal pay principle.
How should your organization prepare for the EU pay transparency directive?
The requirements mentioned above follow from the Pay Transparency Directive. Norway is free to introduce stricter regulation than the directive suggests. It is not yet clear exactly what the Norwegian regulation will look like, but there is reason to believe that the requirements will be close to the EU requirements.
The time leading up to implementation and initial reporting will pass quickly. Therefore, we recommend that organizations start preparing for the upcoming changes now.
The first step should be to map existing procedures for salary determination and analyze salary differences between genders and across different job levels within your organization.
Subsequently, your organization will need to develop and update existing processes to align with the objective criteria outlined in the directive, while ensuring that necessary information is readily available for future reporting requirements.
By starting preparations early, your organization will be well equipped to meet the new requirements when they come into force. Feel free to contact us for advice on how your organization can best adapt to the Pay Transparency Directive.
