Pay Transparency: What Will Change for Businesses in 2026
The European Pay Transparency Directive must be transposed into French law by June 7, 2026. Its goal is to promote equal pay for women and men and improve transparency in companies’ pay policies.
But beyond the regulatory aspects, this reform will above all prompt many companies to reevaluate their HR structure, their internal processes, and the way they organize their compensation data.
Pay transparency: a reform that goes beyond the mere issue of wages
European Directive 2023/970 introduces new requirements regarding pay transparency.
Until now, many companies have managed their compensation policies in a relatively opaque manner, with criteria that were sometimes poorly defined or scattered across various tools.
The reform aims to make compensation practices more transparent, more traceable, and easier to justify.
According to the official website of the Public Service, employers will be required, in particular, to make public the criteria used to determine:
- compensation;
- pay levels;
- and salary increases.
The directive also provides for stronger protections for employees and job applicants.
What will change starting with the hiring process
One of the most noticeable changes will be in job postings.
Companies will now be required to:
- indicate the proposed salary or a salary range before the first interview;
- provide certain information regarding the applicable agreements;
- and stop asking candidates about their compensation history.
These measures are designed to reduce persistent pay gaps and promote equity starting with the recruitment process.
Which companies will be affected?
The directive sets out different requirements depending on the size of the company.
Companies with more than 250 employees
Companies with more than 250 employees will be required to report annually on the gender pay gap.
They will also be required to correct certain discrepancies exceeding 5% when such discrepancies cannot be justified by objective criteria.
Companies with 100 to 249 employees
Companies with between 100 and 249 employees will be required to submit a report every three years according to a phased schedule:
- starting in 2027 for companies with 150 to 249 employees;
- starting in 2031 for companies with 100 to 149 employees.
Companies with fewer than 100 employees
Companies with fewer than 100 employees will not be subject to the same reporting requirements.
However, they are still subject to several related rules:
- transparency in compensation;
- in accordance with the criteria for salary adjustments;
- and hiring practices.
A very tangible impact for small and medium-sized businesses
For many companies, this is not just a legal issue.
The reform also raises some very practical issues:
- centralization of HR data;
- formalization of compensation criteria;
- monitoring salary trends;
- document organization;
- traceability of information;
- and preparing reports.
Many small and medium-sized businesses will need to gradually review:
- their pay scales;
- their internal processes;
- and their HR management tools.
In some cases, the information already exists… but is scattered across multiple files, emails, folders, or different software programs.
Why HR tools are becoming strategic
In this context, HR and ERP tools will play an increasingly important role.
The goal is not only to generate reports, but also to:
- centralize employee data;
- quickly find the right documents;
- track contracts, absences, timesheets, and pay stubs;
- and gain better visibility into HR data.
A more structured organization not only facilitates regulatory compliance, but also:
- internal communication;
- consistency in compensation practices;
- and the smooth operation of day-to-day HR processes.
Le + Kafinea
Given the changing landscape of HR requirements and the need to better organize employee-related information, having a centralized system offers a significant advantage for small and medium-sized businesses.
In particular, Kafinea allows you to:
- manage employees and employment contracts;
- track absences and timesheets;
- centralize pay stubs and HR documents;
- use customizable dashboards and reports;
- and provide an employee extranet to share certain information in a structured manner.
The goal is not only to streamline administrative tasks, but also to make it easier for companies to find the right information, streamline HR processes, and gain better visibility into their data.
As compensation criteria, historical data, and reporting become increasingly important, a centralized HR system also helps prevent information from being scattered across multiple files, emails, or different tools.
Kafinea helps small and medium-sized businesses gradually streamline their HR processes without disrupting their day-to-day operations.
Pay transparency: regulatory changes… but also organizational changes
Pay transparency is not merely another administrative burden.
For many companies, this reform marks, above all, a broader shift in HR practices:
- greater traceability;
- more formalized criteria;
- better flow of information;
- and a more structured organization of employee data.
Companies that start preparing for these changes now will generally find it easier to adapt their processes in the coming years.