With just eight months remaining until the EU Pay Transparency Directive (EUPTD) takes effect across most Member States, new research from Trusaic and Empsight reveals that most organizations are not prepared to comply based on their current pay equity and transparency practices.
The “2025 Pay Equity Policies and Practices Report: EUPTD Lens” study analyzed data from compensation professionals in 429 large organizations — 76% of which have operations in Europe – about their pay equity practices. Key findings included:
- Only 16% of organizations are ready to meet the EUPTD’s pay equity requirements when analyzing base pay.
- This figure drops to 3% when including total cash compensation (TCC), which covers base pay plus short-term incentives like bonuses.
- Readiness falls further to just 2% when considering total direct compensation (TDC), which includes base pay, short-term incentives, and long-term incentives such as stock options and performance shares.
These results highlight a major gap between current pay equity practices and the comprehensive approach required under the EUPTD.
Why Most Organizations Fall Short
Limited Scope of Pay Equity Analyses
While 92% of organizations analyze base pay in gender pay equity studies, only:
- 38% analyze TCC
- 23% analyze TDC
By excluding variable and long-term incentives, employers risk obscuring the very disparities the Directive is designed to address.
Overreliance on Basic Statistics
Half of organizations rely on basic statistical methods to assess pay equity. This approach does not sufficiently control for legitimate factors such as education, experience, or responsibilities.
- Only 37% of organizations use multiple regression analysis — the method most aligned with the Directive’s requirement to justify pay differences with objective, gender-neutral criteria.
Lack of Specialized Tools
Just 28% of organizations use pay equity software to conduct analyses, despite the Directive’s complexity. Most analyses are spreadsheet-based, leaving results less reliable and harder to defend legally.
Low Transparency with Workers
Although the Directive emphasizes employee access to pay data, only:
- 10% of organizations share pay equity results with employees
- 4% make results public
Without transparency, accountability and employee trust remain limited.
Inconsistent Remediation Timelines
The EUPTD requires employers to remedy unjustified pay gaps ≥5% within six months. Yet only 70% of organizations say they correct base pay inequities within a year — and far fewer act on short- and long-term incentive gaps in the same timeframe.
What This Means for Employers
To comply with the EUPTD, organizations must go beyond checking the box on base pay. True compliance requires:
- Comprehensive analyses covering base pay, bonuses, and long-term incentives.
- Multiple regression or similarly robust statistical methods to control for legitimate factors.
- Regular, annual assessments of pay equity, rather than ad hoc reviews.
- Transparency with employees, ensuring access to both findings and pay ranges.
- Prompt remediation of gaps within the Directive’s six-month window.
How Trusaic Can Help
At Trusaic, we provide a complete solution for EU Pay Transparency Directive compliance.
Our Pay Equity Software Suite enables compliant pay systems, ensures gender-neutral job evaluations, and automates complex reporting obligations to keep you one step ahead of EU pay transparency enforcement.
- PayParity® analyzes your rewards data (compensation/benefits in kind) and quickly identifies inequities to determine if your adjusted gender pay gap is above 5%. It enables you to easily comply with Article 7 (right to information) and Article 6 requirements (pay setting and progression policy).
- Our Remediation Optimization Spend Agent (R.O.S.A.) works as PayParity’s AI remediation partner to find the most cost-effective way to close nominal pay gaps above 5% to ensure compliance.
- Salary Range Finder ensures equitable pay at the point of hire to prevent your pay gap from rising above 5% and enables you to easily comply with the Directive’s salary range disclosure and salary history ban requirements.
- Regulatory Pay Transparency Reporting™ captures your pay equity findings and generates compliant, one-click reports across all EU jurisdictions.
- Our Pay Transparency Agent answers all your pay transparency reporting questions instantly
- Our Communications Agent crafts perfect contextual narratives in any EU language to support your annual pay reports.
Trusaic is GDPR compliant and can assist any organization in any EU state in meeting its obligations under both the EU Corporate Sustainability Reporting Directive and the EU Pay Transparency Directive.
Visit our always updated Member State Transposition Monitor to stay on top of the latest EU Pay Transparency Directive developments.