EU Pay Transparency Directive: uncertainty is not a strategy

On 12 June 2026, KPMG held an exclusive session on the EU Pay Transparency Directive and its implementation across Europe, with a particular focus on the current situation in Belgium following the missed transposition deadline.

On this page, you will find key insights from our webinar, highlighting the latest developments in pay transparency across Europe, the implications for Belgian employers, and the steps organizations can take today to build a robust and compliant approach to pay transparency.

During our recent webinar on pay transparency, one message came through very clearly: the EU Pay Transparency Directive is top of mind. The formal transposition deadline has passed, but for many organizations the practical work is only beginning.

The Directive had to be transposed into national legislation by 7 June 2026. Yet, across Europe, progress has been slow. Only four Member States had fully crossed the finish line by the deadline, and even in those countries, further guidance and practical implementation work remain necessary. Belgium is part of the group still working through the details. One week before the deadline, Belgium requested a six-month extension from the European Commission and submitted a number of questions seeking further clarification.

What does the delay actually mean for Belgian employers?

From a legal perspective, directives are not generally applied directly between private parties; they also first need to be transposed into national law. This means that, today, employees in Belgium will generally not be able to rely directly on the Directive against their employer. But that does not mean there is no risk.

Broader EU principles, including the principle of non-discrimination under Article 21 of the EU Charter, remain relevant. Belgian courts may also be asked to interpret existing national law as far as possible in line with the Directive. In other words: the legal framework is still uncertain, but the direction of travel is not.

Pay transparency is coming. It will require organizations to explain how pay is set, how pay progresses, and how differences between employees doing the same work or work of equal value can be objectively justified. This is not only a legal compliance exercise. It is also a test of reward governance, data quality, leadership alignment, and employee trust.

What should companies be doing in the next three to six months?

Start simple but start now. A readiness assessment is often the best first step. It gives organizations an honest “X-ray” of where they stand today and where the biggest gaps may lie. Do you have the right data? Can you identify comparable groups of employees? Are job descriptions and the job architecture sufficiently robust? Can you explain pay differences based on objective and gender-neutral criteria? Are your pay policies and progression rules clear, consistent, and defensible?

These questions may look straightforward, but in practice they often reveal deeper issues: fragmented data, outdated job classifications, inconsistent reward decisions, unclear governance, or limited documentation. Addressing these issues takes time. Waiting for the final Belgian law may feel like a prudent approach, but it can quickly become risky.

Carolien Van Echelpoel

Partner, People Services | Tax, Legal & Accountancy

KPMG in Belgium

mail
call

Key takeaways from our discussion

Implementation is delayed, not cancelled.
- Progress across EU Member States remains fragmented.
- Only four Member States met the 7 June deadline.
- Belgium has requested a six-month extension and further clarification from the European Commission.
- Although the Directive is generally not directly applicable between employees and employers before national transposition, broader EU principles remain relevant.
Equal does not mean identical.
- Understanding workforce categories and the quality of your underlying data will be crucial.
- Not every pay gap is problematic. The key question is whether differences can be explained by objective and gender-neutral criteria.
- Average figures alone do not tell the full story. Organizations need to understand the drivers of pay differences and be able to explain them clearly.
Proceed, but with care.
- Even in uncertain times, now is the time to assess readiness, identify gaps and define next steps.
- The direction is clear: move forward thoughtfully, deliberately and with a robust fact base.

Preparation is essential; not just to meet compliance requirements, but to ensure your approach is robust, data-driven, and tailored to your organization’s reality.

The most effective approach is to move forward thoughtfully and deliberately. Companies do not need to have every answer today. But they do need to understand their current position, identify priority actions, and prepare leadership for the conversations that will follow. Because when pay transparency becomes a formal obligation, organizations that have already done the groundwork will be in a much stronger position.

If you would like to understand where your organization stands across Europe, KPMG can help you turn your pay data into actionable insights through our KPMG Pay Transparency Dashboard and support you in defining a practical roadmap towards readiness.