DIRECTIVE'S CORE REQUIREMENTS
The deadline for transposition is uniform across all EU countries - by 7 June 2026 and the Directive introduces four structural shifts:
- Pay transparency before hiring, which means that candidates must receive salary ranges before interviews and questions regarding salary history are banned;
- Employee right to pay information, which means that employees can request their own pay level and average pay for comparable roles, broken down by gender.
- Objective pay structures, which means that salaries must be based on objective, gender‑neutral, documented criteria such as skills, responsibility and effort.
- Mandatory pay gap reporting, which means that companies with higher employee count must report gender pay gaps and correct unexplained differences over 5%.
ESTONIA: DIGITALLY DRIVEN AND HIGHLY STRUCTURED
Estonia is treating the Directive as a digital transformation project, not just a legal change, providing a smooth compliance path for companies with modern accounting and payroll systems, but reporting requirements being precise and technical. Draft legislation is under preparation to align national law with the Directive by the EU deadline.
Key local features
Estonia stands out for its strong reliance on automation and state‑provided tools:
- Salary range disclosure before interviews;
- Mandatory access to pay‑setting criteria for employees;
- Automated gender pay gap reporting via Statistics Estonia for companies using integrated payroll systems;
- Correction period of six months for unexplained pay gaps over 5%.
Expected reporting stages
- 250+ employees - annual reporting from 2027;
- 150-249 employees - every 3 years from 2027;
- 100-149 employees - every 3 years from 2031.
Estonia will also be rolling out the PALK project, offering free job‑evaluation methodologies, training and e‑learning tools for employers.
LATVIA: MINIMAL TRANSPOSITION, BUT STRONG EMPLOYEE RIGHTS
Latvia is opting for a minimum compliance approach keeping administrative burden lower, but significantly strengthening employee leverage and employer accountability. Instead of amending multiple laws, the government plans to introduce a new standalone Pay Transparency Law, currently in drafting.
Key local features
Latvia already has equal pay principles embedded in its Labour Law, but the Directive will significantly strengthen enforcement and access to information, where:
- Employers must define clear, objective pay‑setting criteria;
- Employees gain the right to request written pay comparisons, directly or via labour authorities;
- Employers cannot prohibit pay disclosure between employees;
- Unexplained pay gaps above 5% must be addressed and corrected.
Expected reporting stages
Latvia plans to apply reporting requirements only to employers with 100+ employees, strictly following the Directive’s minimum. Smaller employers will still need transparent pay structures and will have to respond to individual pay information requests, but they will not submit regular pay gap reports. The Ministry of Welfare is also preparing official guidelines to help employers build compliant pay systems.
LITHUANIA: BROAD INTERPRETATION AND HEAVY DATA INTEGRATION
Lithuania is relatively advanced in its practical preparation. Draft legislation has already been submitted by the Ministry of Social Security and Labour, with entry into force planned exactly on 7 June 2026.
Key local features
Lithuania is applying the Directive in a broader way than a strict focus on the gender pay gap and leaning toward a general fair pay principle applicable to all employees. Key elements include:
- Ban on salary history questions during recruitment;
- Mandatory salary ranges disclosed before interviews;
- Right to request pay comparisons for all employees, regardless of company size;
- Two‑month deadline for employers to respond to pay information requests;
- 5% unexplained pay gap threshold triggering mandatory justification and corrective action.
Expected reporting stages
- 250+ employees - annual reporting from 2027;
- 150-249 employees - every 3 years from 2027;
- 100-149 employees - reporting from 2031.
Lithuania is also expanding social security data submissions, meaning payroll data will increasingly feed automated gender pay statistics. Enforcement will focus not only on documentation, but on how pay systems work in practice, shaping one of the most compliance‑heavy models in the region, with strong oversight and data‑driven enforcement.
WHAT EMPLOYERS SHOULD BE DOING NOW
Employers across the Baltics are advised to audit pay structures to identify unexplained gaps early, document job evaluation criteria in plain, clear and defensible language, align payroll and HR data and prepare for employee information requests to ensure compliance. For international groups, consistency across Baltic entities will matter more than local nuances. For finance and HR teams, this is less about ideology and more about operational readiness - and June 2026 is closer than it looks.
If you want to understand how these requirements affect your payroll setup, reporting processes or data flows in the Baltics, reach out to us and our payroll teams can help assess readiness and identify gaps.
