For employers, one of the most important labour law changes in 2026 may be the appearance of the pay transparency rules. Under Directive (EU) 2023/970, Member States must transpose into national law by 7 June 2026 the rules intended to strengthen the practical application of the principle of equal pay for equal work or work of equal value.
The aim of pay transparency is not that every employee should receive the same wage, but that pay differences between employees doing the same work or work of equal value should be justifiable on transparent, objective and gender-neutral grounds.
What does pay transparency mean?
The essence of pay transparency is that the employer’s pay system should not be entirely opaque to employees and to job applicants. The aim of the rules is that employees can actually learn on what grounds their wages are determined and that, where relevant, the pay of those working in the same or a similar position can be compared.
This may be particularly significant where an employee assumes that, on grounds of sex, they receive less favourable pay than another employee doing the same work or work of equal value.
The rules are therefore not merely an HR question, but also a labour law, data protection and organisational compliance question.
What obligations can employers expect?
The precise Hungarian rules still depend on the legislative process, but on the basis of the EU directive several obligations are already taking shape for which employers would do well to prepare now.
Employers will presumably have to operate a pay system based on objective, gender-neutral criteria. Such criteria may include professional experience, qualifications, the scope of responsibility, the complexity of the position, performance or the conditions in which the work is carried out.
A further important change may be that employees will be entitled to request information on their own pay level and on the average pay level of employees doing the same work or work of equal value, broken down by sex.
This does not mean that the employer would have to disclose the specific salary of individual employees. The aim of the rules is comparability and the identification of unjustified pay differences, not unlimited access to individual salaries.
Job advertisements and pay ranges
One of the most frequently mentioned elements of pay transparency relates to job advertisements and the selection process. Employers will presumably have to provide information about the starting salary or pay range for the given position already during the recruitment procedure.
In practice this may mean that the employer has to give clear information, before the job interview or at the latest at an early stage of the selection process, on the pay framework within which the given position can be filled.
Another important element is that the employer will not be allowed to ask the applicant about their previous salary, since this could perpetuate earlier pay differences and disadvantages.
Reporting obligation for larger employers
For larger employers, pay transparency may mean not only internal regulatory and information obligations, but regular reporting as well.
Under the directive, for employers with more than 150 employees reporting obligations may start from 2027 on the basis of the 2026 pay data. Reporting rules may also apply to employers with more than 100 employees, on a different timetable.
The purpose of the reports is to reveal whether there is a gender pay gap at the employer and, if so, whether it can be justified on objective grounds. If the difference exceeds a specified level and cannot be justified on objective, gender-neutral grounds, the employer may need to take corrective measures.
Why is it important to prepare in time?
Introducing pay transparency does not merely mean that the employer amends a few job advertisements. The rules will presumably affect employment contracts, internal pay policy, the system of job roles, performance evaluation, HR processes and the order of employee information as well.
An employer can handle the new obligations properly only if it sees precisely:
what positions exist in the organisation, which positions qualify as the same work or work of equal value, on what criteria pay is determined, whether there are unjustified differences between individual employee groups, and whether those differences can be supported by lawful, objective reasons.
Preparation may be particularly warranted at employers where pay practice has developed over a longer period on the basis of individual agreements, bargaining, market pressure or earlier management decisions, and is not backed by a uniform pay policy set out in writing.
What legal risks can failure to comply with pay transparency carry?
Breach of the pay transparency rules may carry several kinds of legal risk. Employees will be able to argue more easily that their pay does not meet the requirement of equal treatment and equal pay. The directive also provides for stronger enforcement instruments, compensation options and, in certain cases, the shifting of the burden of proof onto the employer.
This means that in a possible legal dispute the employer may have to prove that the pay difference is not discriminatory but is based on objective and gender-neutral criteria.
It is therefore particularly important for employers not to try to explain pay differences after the event, but to establish in advance a transparent and documented system that can also be defended in a possible labour dispute.
What is worth doing now?
The precise content of the Hungarian implementing rules still depends on further legislation, but employers would already do well to review their existing employment contracts, job descriptions, pay structures and internal policies.
The following may be particularly warranted:
- reviewing the positions and levels of responsibility,
- setting out the pay criteria in writing,
- establishing or reviewing pay ranges,
- amending the job advertisements and the selection processes,
- establishing employee information processes,
- and strengthening the way HR and management decisions are documented.
The introduction of pay transparency is therefore not solely a question of legal compliance. With appropriate preparation it can contribute to a more transparent and more predictable pay system that is also easier to defend from the employer’s point of view.
How can our law office help?
Dobrocsi Law Office assists employers in preparing for the pay transparency rules, in particular with the legal review of employment contracts, job descriptions, internal policies, pay policy documents and employer information notices.
Our aim is that our clients should have labour law documentation and internal operating rules that comply with the changing legal environment and can be properly supported in the event of an employee claim or a labour dispute.
If, as an employer, you would like to review your labour law documents or prepare for the 2026 pay transparency rules, please contact our law office with confidence.
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