Directive 2023/970/EU · Compliance Matrix

The EU Pay Transparency Directive,
Article by Article.

Directive 2023/970/EU imposes 34 Articles of obligation on Member States and employers. This page walks every Article that creates an operational obligation on employers, and sets out exactly what Vareqa delivers, what it enables, and where an employer still needs to act outside the platform. Built for General Counsel review and mid-market procurement due diligence.

Directive
2023/970
Adopted 10 May 2023
Transposition deadline
7 Jun 2026
All 27 Member States
First reporting cycle
7 Jun 2027
Employers of 150+
Burden of proof
Reversed
For transparency breaches
How to read this matrix
Three coverage categories. No ambiguity.
Not every Article of the Directive is an operational obligation Vareqa can or should fulfil. Some describe national enforcement procedures. Some govern the legal process. Some establish definitions rather than duties. This matrix classifies every employer-facing obligation into one of three categories and tells you plainly which one applies.
Vareqa fulfils
Operational obligations Vareqa directly performs.
The platform produces the regulator-ready output. Where this badge appears, the employer's primary task is to review, approve, and publish. Articles 4, 5, 6, 7, 9, and 10.
Vareqa enables
Vareqa provides the evidence, the employer exercises the defence.
The platform generates the audit trail, methodology documentation, and decision rationale that constitute the employer's defensive posture, but the employer must still engage legal counsel for the specific procedure. Articles 18, 20, 22, 23.
Out of scope
Outside Vareqa's software boundary.
The obligation sits with the Member State, the employer's legal counsel, or internal HR policy, not with a software platform. Articles 1-3 (scope and definitions), 11-17 (enforcement procedure), 24+ (transposition). Listed for completeness.
A note on precision
The Directive is most often cited in marketing with single-number Article references ("Article 4", "Article 9"). The Directive text itself is sub-structured: Article 4 has four paragraphs, Article 9 has ten. Where a specific paragraph creates the concrete obligation, we cite it directly (for example, Article 4(4) for the evaluation criteria, Article 9(1)(a)-(g) for the seven reporting indicators). This level of precision is what a General Counsel expects in a compliance review and what Vareqa's methodology is engineered to deliver against.
Chapter I
General Provisions
Scope, definitions, and the foundational obligation to maintain pay structures that permit equal-pay comparison.
Art. 1
Subject matter
Subject matter of the Directive
Establishes the Directive's purpose: strengthening equal pay for equal work or work of equal value through pay transparency and reinforced enforcement. Creates no direct employer obligation.
Out of scope
What the Article says

Article 1 sets out the Directive's minimum requirements to strengthen the principle of equal pay enshrined in Article 157 TFEU and the prohibition of discrimination in Directive 2006/54/EC, in particular through pay transparency and reinforced enforcement mechanisms.

What this means for employers

This is a framing Article with no operational duty. It establishes the Directive's legal basis and interpretive scope. Employers are affected through the subsequent Articles that translate the principle into concrete obligations.

Art. 2
Scope
Who the Directive covers
Applies to all employers in the public and private sectors and to all workers with an employment contract, including part-time, fixed-term, agency, and management workers. For Article 5 (pay transparency prior to employment), also covers applicants.
Out of scope
What the Article says

The Directive applies to employers in both public and private sectors, and to all workers with an employment contract or relationship as defined by each Member State's law, collective agreements, or practice. Recital 18 confirms this includes part-time workers, fixed-term workers, agency workers, management, domestic workers, platform workers, trainees, and apprentices. Article 5 additionally covers job applicants.

What this means for employers

A scoping Article, not an operational obligation. The practical question, whether a specific worker or contractor falls within scope in a given jurisdiction, is a legal determination that depends on national law and case law. Employers with mixed workforces (contractors, agency staff, platform workers) should confirm scope with counsel before Directive-triggered obligations are assessed.

Art. 3
Definitions
Definitions of pay, pay gap, category of workers
Establishes the vocabulary of the Directive. Defines pay (including variable components), pay level (gross annual and hourly), gender pay gap, median pay level, quartile pay band, work of equal value, and category of workers.
Out of scope
What the Article says

Article 3 defines thirteen core terms. The definitions that matter operationally:

  • Pay includes wages, salary, and any other consideration in cash or in kind (bonuses, overtime, housing, travel, pensions).
  • Category of workers means workers grouped non-arbitrarily using the Article 4(4) gender-neutral criteria.
  • Work of equal value means work determined to be equivalent under those same criteria.
  • Median gender pay gap is the difference between median male and female pay levels.
Why this matters in practice

These definitions are the reference point for every downstream obligation. The Article 9 reporting indicators, the Article 10 joint assessment trigger, and the Article 7 right-to-information response all depend on how "category of workers" and "pay" are defined. An employer using a grouping methodology that disagrees with Article 3 is exposed at every stage.

REF™ grades produced by Vareqa are designed to satisfy the Article 3(h) definition of "category of workers" directly: non-arbitrary, grouped by the gender-neutral criteria of Article 4(4).

Art. 4
Equal value
Equal work and work of equal value
Employers must have pay structures that enable comparison of the value of work on the basis of objective, gender-neutral criteria: skills, effort, responsibility, and working conditions. Relevant soft skills must not be undervalued.
Vareqa fulfils
What the Article says

Article 4(1): employers must have pay structures ensuring equal pay for equal work or work of equal value.

Article 4(2): Member States must make analytical tools and methodologies accessible to support gender-neutral job evaluation.

Article 4(4): pay structures must enable assessment of whether workers are in a comparable situation. Criteria must not be based on sex and must include skills, effort, responsibility, and working conditions. Relevant soft skills must not be undervalued.

How Vareqa fulfils this

REF™ is an eight-factor methodology engineered to satisfy Article 4(4). The four mandatory criteria are directly present:

  • Skills: F-02 Knowledge Depth and F-07 Innovation Requirement.
  • Effort: F-03 Problem Complexity.
  • Responsibility: F-01 Organisational Impact, F-04 Decision Autonomy, F-05 People Leadership.
  • Working conditions: F-08 Working Environment.

F-06 Influence and Communication is the "other factor relevant to the position" that Article 4(4) expressly permits. Every factor has documented gender-neutrality rationale.

REF™ Methodology Role Evaluator Compare Roles
Residual employer work

Article 4(4) requires that the criteria be agreed with workers' representatives where such representatives exist. Vareqa produces the methodology documentation and the factor-by-factor rationale, but the consultation with works councils or union representatives is the employer's process and should be documented by HR. Where no representatives exist, this is a null requirement.

Chapter II · Articles 5 to 10
Pay Transparency
The operational core of the Directive. Six Articles creating concrete obligations before hiring, during employment, at annual reporting, and at the joint assessment trigger.
Art. 5
Pre-employment
Pay transparency prior to employment
Applicants have a right to receive the initial pay or pay range for the position, in writing, before the interview. Employers cannot ask about pay history. Job titles and vacancy notices must be gender-neutral.
Vareqa fulfils
What the Article says

Article 5(1)(a): applicants must receive the initial pay or range, based on objective gender-neutral criteria, in the job vacancy notice or before the interview.

Article 5(1)(b): where applicable, the relevant provisions of any collective agreement.

Article 5(2): pay history questions are prohibited.

Article 5(3): job notices and titles must be gender-neutral.

How Vareqa fulfils this

The Pay Band Builder constructs a defensible salary range for every REF™ grade in the organisation. The Salary Range Publisher generates Article 5-compliant text for job postings, linked to the role's grade, with the gender-neutrality rationale traceable to the underlying factor scores.

The Job Description Writer produces gender-neutral vacancy notices and titles by design, with bias-detection prompts and rewording suggestions built into the workflow.

Pay Band Builder Salary Range Publisher JD Writer
Residual employer work

The pay history prohibition (Article 5(2)) is an HR process and recruiter training matter, not a platform output. Vareqa can provide GC-ready policy templates and interviewer guidance notes, but the pay history prohibition requires HR policy discipline and, in some jurisdictions, recruiter training records as evidence.

Art. 6
Pay setting & progression
Transparency of pay setting and pay progression
Employers must make easily accessible to workers the criteria used to determine pay, pay levels, and pay progression. Criteria must be objective and gender-neutral. Member States may exempt employers under 50 workers from the progression part.
Vareqa enables
What the Article says

Article 6(1): employers must make easily accessible to workers the criteria used to determine workers' pay, pay levels, and pay progression. Those criteria must be objective and gender-neutral.

Article 6(2): Member States may exempt employers with fewer than 50 workers from the pay progression element.

Recital 35 clarifies: pay progression means "how a worker moves to a higher pay level" and includes individual performance, skills development, and seniority.

How Vareqa contributes

Pay determination is fully covered: REF™ is the methodology, the WIF Documentation module publishes it in employee-accessible form, and the Pay Band Builder provides the pay-level logic linked to each grade.

Pay progression is partially covered. Vareqa surfaces the progression geometry (how grades, bands, and within-band movements relate), but the specific criteria the employer uses to move someone within a band, performance ratings, seniority thresholds, skills acquisition, are HR policy decisions that Vareqa documents but does not author.

WIF Documentation Pay Band Builder
Residual employer work

The pay progression policy must be authored by the employer. Vareqa documents and publishes the employer's stated progression criteria, surfaces them to employees via the WIF Documentation module, and tests them for gender-neutrality on request. But the underlying policy (the rules that govern movement within and between bands) is an HR design decision that a CHRO, Total Rewards Lead, or Compensation Committee must make. Employers below 50 workers may be exempted from this part by their Member State, Article 6(2), but most of Vareqa's ICP falls above the threshold.

Art. 7
Right to information
Employee right to information
Workers can request, in writing, their individual pay level and the average pay levels broken down by sex for comparable-work categories. Employer must respond within 60 days. Employees must be informed of this right annually.
Vareqa fulfils
What the Article says

Article 7(1): workers have the right to request, in writing, their individual pay level and the average pay levels broken down by sex for categories of workers performing the same work or work of equal value.

Article 7(2): workers may act through representatives or the equality body. Where the response is inaccurate or incomplete, workers have a right to additional clarification.

Article 7(3): employers must inform workers of this right annually.

Article 7(4): employers must respond within a reasonable period, in any event within two months of the request.

Article 7(5): pay secrecy contractual clauses are prohibited.

How Vareqa fulfils this

The Employee Right-to-Information Report module is engineered specifically against Article 7. For a given employee, it generates:

  • Their individual pay level (gross annual and gross hourly, per Article 3(b)).
  • The average pay levels for their REF™ grade category, broken down by sex, per Article 7(1).
  • The factor-by-factor rationale behind their grade, linking back to Article 4(4) criteria.
  • In the employee's language (14 supported, including all major EU employment languages).

Automatic 60-day deadline tracking. Audit trail retained. The annual notification of this right (Article 7(3)) is a configurable workflow trigger.

Employee RTIR Multilingual Output Audit Trail
A note on the clarification cycle

Article 7(2) gives workers the right to request additional clarification if the response is inaccurate or incomplete. The clarification cycle is supported in the Vareqa Workbench, but the substantive reply, whether to revise the grade, challenge the request, or escalate, remains an HR judgement call. Vareqa produces the evidence base for that judgement; the decision is the employer's.

Art. 8
Accessibility
Accessibility of information for persons with disabilities
Information shared under Articles 5, 6, and 7 must be provided in a format accessible to persons with disabilities, taking into account their particular needs.
Vareqa enables
What the Article says

Article 8: all information provided under Articles 5, 6, and 7 must be in a format accessible to persons with disabilities, taking into account their particular needs. Recital 37 references adequate font size, sufficient contrast, and alternative formats, and cross-refers to Directive (EU) 2016/2102 on web accessibility in the public sector.

How Vareqa contributes

Vareqa's platform UI and the outputs it generates (RTIR reports, WIF documentation, job postings) are designed to WCAG 2.1 AA standards: sufficient contrast, scalable type, semantic HTML, screen-reader compatible. Reports can be exported in formats (PDF/UA, tagged HTML) that support assistive technology.

Residual employer work

Where an individual employee requires a non-default format (for example, braille, large-print hard copy, or translated audio), the employer is responsible for the production of that specific accommodation. Vareqa provides the accessible source; the reformatting for a specific individual's needs is an HR workflow.

Art. 9
Pay gap reporting
Reporting on pay gap between female and male workers
Employers of 100 or more must report seven specific pay-gap indicators to a Member State monitoring body. Reporting frequency is annual for 250+ and triennial for 100-249. First cycle: June 2027 (150+) or June 2031 (100-149).
Vareqa fulfils
The seven mandatory indicators under Article 9(1)
  • (a) The gender pay gap.
  • (b) The gender pay gap in complementary or variable components.
  • (c) The median gender pay gap.
  • (d) The median gender pay gap in complementary or variable components.
  • (e) The proportion of female and male workers receiving variable components.
  • (f) The proportion of female and male workers in each quartile pay band.
  • (g) The gender pay gap between workers by category, broken down by basic salary and variable components.

Indicators (a) to (f) can be published; indicator (g) must be shared with all workers and with the labour inspectorate or equality body on request.

How Vareqa fulfils this

The Pay Gap Calculator and Pay Equity Audit modules compute all seven indicators from a single data upload. The methodology:

  • Category-of-workers grouping is drawn directly from REF™ grades (Article 3(h)-compliant).
  • OLS regression with controls for grade, tenure, and role, separating adjusted from unadjusted pay gap.
  • Quartile distribution calculations and variable-component disaggregation.
  • Year-on-year trend analysis once a second reporting cycle is loaded.
  • Output formatted for direct submission to the Member State monitoring body.
Pay Gap Calculator Pay Equity Audit Multi-Jurisdiction Report
Residual employer work

Article 9(6) requires management to confirm the accuracy of the information after consulting workers' representatives, who are to have access to the methodology applied. Vareqa provides the methodology documentation and full calculation audit trail; the management confirmation and the works council consultation are the employer's process.

Art. 10
Joint pay assessment
Joint pay assessment
Triggered where reporting shows a difference of at least 5% in average pay between female and male workers in any category, the employer has not justified it on gender-neutral grounds, and has not remedied it within six months. A structured analysis must follow in cooperation with workers' representatives.
Vareqa fulfils
When the trigger fires

Article 10(1) sets three cumulative conditions:

  • The Article 9 reporting shows a difference of at least 5% in average pay in any category of workers.
  • The employer has not justified that difference on objective, gender-neutral grounds.
  • The employer has not remedied it within six months of submitting the report.

If all three apply, a joint pay assessment must be conducted with workers' representatives.

What the assessment must contain (Article 10(2))
  • Proportion of female and male workers in each category.
  • Average female and male pay levels and variable components per category.
  • Any differences in average pay by category.
  • The reasons, based on objective gender-neutral criteria, jointly established with representatives.
  • The measures taken to address any unjustified differences.
How Vareqa fulfils this

The Pay Equity Audit module auto-flags Article 10 triggers on every reporting cycle. Where the trigger fires, the Joint Pay Assessment workflow (in active development, targeted for the Q2 2026 release) produces the five-point structured analysis required by Article 10(2), including:

  • Category breakdown with proportion, average pay, and variable component analysis.
  • Within-Band Pay Justification Report surfacing the specific roles, tenures, and performance factors explaining any gap.
  • A remediation tracking module that captures the proposed measures, implementation timeline, and closure verification.

The joint nature of the assessment, including the employer's consultation with workers' representatives, is supported by Vareqa's audit trail and shared-view capabilities, but the conversation itself is a governance process the employer owns.

Pay Equity Audit Within-Band Justification Art. 10 Trigger Alert
Reporting thresholds and first-cycle dates
Article 9 reporting applies to employers of 100 or more workers, phased by size. These dates are set by the Directive and are not Member State discretion, although some Member States may accelerate. This is the schedule your compliance calendar must reflect.
Employer size
First reporting cycle
Frequency
250+ workers
Article 9(2)
By 7 June 2027, reporting on calendar year 2026.
Annual thereafter.
150 to 249 workers
Article 9(3)
By 7 June 2027, reporting on calendar year 2026.
Every three years.
100 to 149 workers
Article 9(4)
By 7 June 2031, reporting on calendar year 2030.
Every three years.
Under 100 workers
Article 9(5)
Voluntary. Member States may legislate.
Not mandated at Directive level.
Chapter III · Articles 14 to 23
Remedies and Enforcement
Where the teeth of the Directive live. Burden of proof, compensation, penalties, and retaliation protection. These Articles do not create platform-scale obligations, but Vareqa's evidence is what anchors the employer's defence.
Art. 18
Burden of proof
Shift in the burden of proof
In any administrative or court proceeding regarding pay discrimination, where the employer has not complied with Articles 5, 6, 7, 9, or 10, the burden of proof shifts to the employer to show no discrimination has occurred. The exception, "manifestly unintentional and minor", is narrow.
Vareqa enables
Why this Article matters more than it looks

This is the provision that converts a transparency gap into direct legal exposure. If the employer cannot produce the Article 4 methodology, the Article 5 pay range, the Article 7 response, the Article 9 report, or the Article 10 assessment, in a proceeding, the burden falls to the employer to prove no discrimination occurred. That is the legal inverse of the usual employer position.

Recital 52 cites Case C-109/88, where the Court of Justice held that "when a system of pay is totally lacking in transparency, the burden of proof should be shifted to the respondent, irrespective of the worker showing a prima facie case". The Directive now codifies that principle.

How Vareqa contributes to the defence

Vareqa's full audit trail is what allows an employer to meet the shifted burden. For every grade, every pay decision, and every Article 7 response, the platform retains:

  • The AI-proposed evaluation and its factor-by-factor rationale.
  • Any human override, with user identity and timestamp.
  • The REF™ methodology version in force at the time of the decision.
  • The Article 9 report submissions and supporting calculations.
  • The dated copies of published pay bands under Article 5.

This is the evidence base a General Counsel presents in the proceeding. The legal argument itself is for counsel; the evidence is what Vareqa ensures exists.

Audit Trail Version History GC Briefing Pack
A warning: the "manifestly unintentional and of a minor character" exception in Article 18(2) is worded narrowly. Case law is likely to interpret it strictly. An employer relying on the exception to excuse a missed Article 9 filing or an unanswered Article 7 request should not expect to succeed. The practical posture is to meet every obligation in Articles 5 to 10 and treat Article 18 as the consequence if any are missed.
Art. 20
Retaliation protection
Protection against victimisation and retaliation
Workers who exercise or attempt to exercise their rights under the Directive are protected from any adverse treatment. Protection extends broadly, including representatives, witnesses, and those who support a complaint.
Out of scope
What the Article says

Workers and their representatives are protected from adverse treatment, including dismissal, reassignment, or any disadvantage, as a reaction to any attempt to exercise a Directive right, file a complaint, or participate in proceedings. Per Recital 58, this protection is to be interpreted broadly and extends to witnesses.

Why this is not a platform obligation

Retaliation protection is an employer-conduct and HR-policy matter, not a software output. Vareqa retains the audit trail of a worker's Article 7 requests and the responses provided, which can serve as evidence in a retaliation dispute, but the substantive obligation (not retaliating) is a matter of HR policy, manager training, and internal investigation capability.

Art. 22
Compensation
Compensation or reparation
Workers who suffer gender-based pay discrimination are entitled to full compensation, including back pay, bonuses, payments in kind, lost opportunities, non-material damage, and interest. Member States may not fix an upper limit.
Vareqa enables
What the Article says

Full compensation, uncapped. Includes back pay, all related bonuses or payments in kind, compensation for lost opportunities (for example, access to benefits that depend on pay level), non-material damage (for example, distress from undervaluation of work), and interest. Recital 50 refers to intersectional factors that can increase the compensation due.

How Vareqa contributes

Compensation calculations depend on an accurate historical view of pay levels, band placements, and the specific points at which the discrimination began and ended. Vareqa's version history of pay bands, RTIR responses, and grade decisions provides the evidentiary base for both sides of a compensation dispute: the employer's defence as to when and why a decision was made, and the employee's case for the scope of the remedy.

The Within-Band Pay Justification Report can also surface, at policy-review time, where specific band placements may be exposed to an Article 22 claim, enabling proactive remediation before a dispute arises.

Version History Within-Band Justification
Residual employer work

The compensation determination is a legal and judicial process. Vareqa preserves the evidence that informs the determination; the calculation, negotiation, and settlement are the employer's counsel's domain.

Art. 23
Penalties
Penalties for non-compliance
Member States must establish effective, proportionate, and dissuasive penalties including fines based on gross annual turnover or total payroll. Specific penalties for repeated infringements may include exclusion from public procurement.
Out of scope
What the Article says

Penalties must be effective, proportionate, and dissuasive. Fines may be based on gross annual turnover or total payroll. Aggravating factors include intersectional discrimination and repeated infringement. Per Recital 56, repeat-offender penalties may include revocation of public benefits and exclusion from public tenders.

Concrete fine levels are set by each Member State in transposition. Several Member States have signalled fines in the range of up to 3% of global annual turnover for the most serious or repeated breaches.

Why this is not a platform obligation

Article 23 is addressed to Member States, not employers. The employer-facing equivalent is the consequence of non-compliance with the underlying transparency obligations in Articles 5 to 10. Vareqa's role is to make sure those obligations are met; the penalty framework is a legal landscape the employer's GC should map against each jurisdiction of operation.

Completeness
What Vareqa does not claim to cover
The Directive has 34 Articles. The matrix above covers the Articles that create operational obligations on employers and where Vareqa is relevant. The following Articles sit outside Vareqa's software boundary, by design, and are flagged here so that a General Counsel reviewing this matrix can confirm the scope is honest.
Art. 11
Data protection
Processing and disclosure of personal data
Any personal data processed under Articles 7, 9, or 10 must comply with GDPR and must not be used for any purpose other than applying the principle of equal pay. A Data Protection Officer or external counsel handles this; Vareqa is GDPR-compliant by design but does not author DPIAs on the employer's behalf.
Out of scope
Art. 12
Collective bargaining
Social dialogue
Member States must encourage social partners to address equal pay in collective bargaining. This is a Member State obligation, not an employer obligation, and sits outside a software platform.
Out of scope
Arts. 13 to 17
Legal procedure
Access to justice, equality bodies, and enforcement procedure
Cover defence of rights, procedures on behalf of workers, the role of equality bodies, and the right to compensation in court. These are the legal process of the Directive. Vareqa's audit trail supports the evidentiary posture; the procedure itself is counsel's work.
Out of scope
Art. 19
Limitation
Limitation periods
Member States must set a limitation period of at least three years for bringing a claim under the Directive. This is a jurisdictional legal matter, not a platform feature.
Out of scope
Art. 21
Legal costs
Legal and judicial costs
National courts may relieve an unsuccessful claimant of legal costs where the claim was reasonable. Governs court procedure, not employer operations.
Out of scope
Arts. 24 to 34
Closing provisions
Public procurement, horizontal clauses, monitoring, transposition
Cover exclusion from public contracts for non-compliance (Article 24), non-regression clauses, Member State monitoring bodies, statistics, reporting to the Commission, and the 7 June 2026 transposition deadline. Framework obligations on Member States, not operational obligations on employers.
Out of scope
The Compliance Risk Audit
Find out which Articles you are already exposed on.
A 30-minute structured audit with a Vareqa specialist. Walks your organisation through each of the operational Articles above and identifies specific exposure points. No platform demo unless you ask for one. Delivered by the same methodology that produces the GC briefing pack.
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