The EU Pay Transparency Directive must be implemented into Swedish law no later than June 2026 and introduces new requirements for all employers – regardless of size. For HR, it’s about more than compliance: the directive is an opportunity to build trust, create fair pay structures, and strengthen the employer brand.
A New Step Towards Fair Pay
In June 2023, the EU adopted a new Pay Transparency Directive, which must be transposed into Swedish law no later than 7 June 2026. The aim is clear: to increase transparency in pay structures and ensure the principle of equal pay for equal or equivalent work.
The directive introduces several changes that will directly affect both HR and managers in their daily work:
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More transparent recruitment processes. Candidates are entitled to receive information about the starting salary or salary range early in the recruitment process. At the same time, employers are prohibited from asking about a candidate’s previous salary.
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Clear and objective pay criteria. All organisations must be able to demonstrate that their pay criteria are fair, gender-neutral, and accessible to both employees and job applicants.
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Right to pay transparency for employees. Employees will have the right to request information on salary levels for colleagues in comparable roles.
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Expanded pay audits. The annual pay audit will become more comprehensive – employers will need to analyse pay gaps, document the causes, and take corrective actions.
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Reporting requirements for larger companies. Organisations with more than 100 employees will be required to publish pay reports and disclose gender-based pay differences.
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Risk of sanctions for non-compliance. Employers that fail to meet the requirements may face financial penalties and damages.
In short, pay-setting can no longer be an internal, hidden process – it must withstand scrutiny, be fair, and fully transparent.
How Will It Affect Your Organisation?
The impact of the directive will vary depending on the size of your organisation.
Small companies (< 10 employees)
Even the smallest employers will be affected. The directive requires you to define and communicate clear pay criteria that are fair and gender-neutral. Transparency will be mandatory, although reporting requirements will be lighter than for larger companies.
Medium-sized companies (10–249 employees)
For employers already subject to Swedish legislation on pay audits, the requirements will now become stricter. It’s no longer just about identifying differences – you must also analyse the causes and document them thoroughly. Employees will also gain stronger rights to pay transparency, and recruitment processes must be adjusted. For organisations with more than 100 employees, regular pay reporting to the Equality Ombudsman (DO) will be required.
Large organisations (≥ 250 employees)
For the largest employers, reporting requirements will become more extensive and frequent. Pay gaps must not only be identified but also explained – or addressed. This places higher demands on HR systems, internal communication, and collaboration between HR, management, and legal teams.
Regardless of size, one thing is clear: transparency is no longer optional – it is part of the future workplace.
Checklist: Preparing HR for 2026
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Assess your current situation – review pay policies, procedures, and recruitment processes.
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Define objective criteria – ensure that pay decisions are based on clear, gender-neutral, and fair criteria.
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Strengthen data collection – HR systems must be able to handle gender-segregated pay data and track pay development over time.
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Adjust recruitment practices – update job postings, share salary ranges, and remove questions about pay history.
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Build transparency and communication – inform employees of their rights and establish clear processes for pay information requests.
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Prepare for reporting – particularly important for organisations with more than 100 employees, where recurring pay reporting will be required.
From Legal Requirement to Opportunity
When the Pay Transparency Directive is transposed into Swedish law in 2026, it will have concrete consequences for all employers. Failure to comply may result in financial penalties and damages – but also in a loss of trust in a labour market where fairness and transparency are becoming increasingly important.
That’s why HR must act now. By starting preparations early, organisations can not only ensure compliance but also strengthen their attractiveness to employees, candidates, and customers. In other words: pay transparency is not just a legal obligation – it’s an opportunity to enhance both employer branding and workplace culture.
