Salary discussions will no longer be taboo starting summer 2026

For companies, however, the change is far deeper. Salary structures will need to be redesigned based on objective and verifiable criteria, and any inconsistencies or unjustified differences could quickly lead to costly disputes, according to specialists from TPA Romania, a leading firm in Central and Eastern Europe providing audit, accounting, tax advisory and legal advisory services.

“Beyond the administrative fines for failing to comply with the obligations introduced by the directive — which will be established through national legislation and must be proportionate and dissuasive — failing to adapt to transparency requirements exposes companies to a major risk: increased vulnerability to lawsuits from employees claiming pay inequality or discrimination,” explains Dan Iliescu, Legal Partner at TPA Romania.

Employees may request salary adjustments and compensation, including full recovery of unpaid amounts, bonuses, or benefits in kind. The risk is amplified by the fact that the burden of proof lies with the employer, while sanctions for breaches must be effective, proportionate, and dissuasive, including fines.

What the EU Pay Transparency Directive requires

Directive (EU) 2023/970, which must be transposed into national legislation by June 7, 2026, prohibits clauses and practices that prevent employees from disclosing their own salaries, comparing them with those of other employees, or using this information to verify or claim equal pay. Although salaries will not become fully public, they will no longer remain a closely guarded secret, according to TPA Romania representatives.

Salary confidentiality will no longer be regulated in the Labour Code as an explicit employer obligation, nor can it be imposed as a general rule by employers. Instead, confidentiality becomes an individual option of the employee. As a result, employment contracts, internal regulations, and HR policies containing salary confidentiality clauses will need to be reviewed and aligned with the new framework.

“The directive does not eliminate individual salary negotiations, but it fundamentally changes their nature. Compensation must fit within a coherent system — a salary grid based on objective criteria and free from gender-based differences,” Iliescu adds. Pay differences may still exist, but only if they can be justified through strictly objective factors such as competencies, responsibilities, performance, seniority, qualifications, or working conditions.

Another major shift concerns recruitment practices. Employers will be required to communicate the salary level or salary range for a position either in the job advertisement or at the latest before the first interview. Additionally, employers will no longer be allowed to ask candidates about their previous salary.

Employees will also gain an explicit right to request information from their employer regarding their own pay level, the average pay levels for comparable roles, and aggregated data, including breakdowns by gender. Employers must respond within a reasonable timeframe and provide relevant information without disclosing individual personal data. Managing this right requires a careful balance between transparency and personal data protection.

Reporting obligations and how prepared Romanian companies are

For companies with more than 100 employees, the directive introduces phased reporting obligations to the competent national authority starting June 7, 2027, with reporting frequency either annually or every three years, depending on the size of the organization.

If reports reveal pay gaps exceeding 5% that cannot be justified by objective and gender-neutral criteria, employers will be required to conduct a joint pay assessment together with employee representatives. For companies with fewer than 100 employees, reporting gender pay gaps will be optional rather than mandatory. Nevertheless, organizations of all sizes will still need to respect the principle of pay equity.

“At this point, there are no significant macro-level studies regarding how prepared companies in Romania are. However, it is clear that the private sector is still far from ready for the challenges brought by the new legislation,” Iliescu says. Even in the public sector — where pay is established by law and should be fully transparent — there are areas where salary grids and criteria remain difficult to follow or insufficiently clarified.

How employers can prepare

According to TPA Romania specialists, employers should start by analyzing whether they have implemented salary and career development policies based on objective and verifiable criteria, and whether there are significant pay differences between comparable categories of employees, especially between women and men performing similar roles.

Companies should also introduce clear HR procedures regarding recruitment and transparent communication of salary ranges to candidates. In addition, organizations are advised to implement an internal mechanism to manage employee requests related to pay information, defining responsibilities, timelines, and formats for providing the data.

“Although the most visible challenge may appear to be the shift in organizational culture — traditionally built around salary confidentiality — from a practical standpoint, aligning salary structures with the directive’s requirements may prove to be the most difficult exercise. Justifying or eliminating existing pay differences will require substantial analysis. The processes of transparency, reporting, and informing employees will also raise challenges depending on how sophisticated each employer’s compensation policies are,” Iliescu notes.

Transposition into national legislation

The deadline for transposing the directive into Romanian law is June 7, 2026, but so far no draft legislation has entered the formal legislative process. According to the government’s annual EU directive transposition plan for 2026, the Ministry of Labour, Family, Youth and Social Solidarity and the National Agency for Equal Opportunities between Women and Men were expected to prepare a draft law amending Article 163 of the Labour Code (Law No. 53/2003) and Law No. 202/2002 on equal opportunities for women and men.

The initial timeline included drafting the law during 2025, interinstitutional consultation and approvals in the autumn of the same year, parliamentary adoption at the beginning of 2026, and publication in the Official Gazette by April 2026, followed by notification to the European Commission in May 2026.

“If the implementation timeline is not respected, the infringement procedure mechanism will become applicable — something Romania is unfortunately quite familiar with — from a formal notice by the European Commission to a potential referral to the Court of Justice of the European Union and financial penalties imposed on the Romanian state for delayed transposition,” Iliescu explains. Even if delays occur, certain provisions of the directive may still be invoked against the state and public entities, while national courts will be required to interpret domestic law in line with EU law.

European countries already applying pay transparency

Several European countries had already introduced pay transparency mechanisms or gender pay gap reporting obligations in national legislation even before the directive was adopted. Relevant examples include Belgium, where certain measures apply partially in the public sector, as well as initiatives implemented in Finland, Ireland, Sweden, and the Netherlands.

Their experience shows that transparency does not remain a formal exercise but generates structural changes within organizations. Reporting obligations push companies to review and clarify their compensation policies, while the exposure of pay gaps accelerates the standardization of evaluation and reward criteria. Countries that introduced transparency mechanisms and objective pay frameworks early have generally gone through the implementation stages with fewer tensions and fewer abrupt adjustments, Iliescu concludes.