New pay transparency requirements - what you need to know

What is the Pay Transparency Directive?

The purpose of the Directive is to strengthen the equal pay principle and to combat gender discrimination by increasing pay transparency and transparency in pay setting. The concept of pay is interpreted broadly in the Directive and covers all forms of remuneration paid by the employer - from basic salary and bonuses to overtime pay, travel allowances, sick pay, occupational pensions and severance pay, among others.

The Pay Transparency Directive must be implemented in Sweden by 7 June 2026 (proposed 1 June 2026) and will affect everything from recruitment processes to how salaries are set, documented and communicated. Implementation will take place through additions and amendments to the Swedish Discrimination Act.

Who is affected?

The Directive affects several different groups:

Employers - All employers with at least 100 employees must submit a pay report to the DO.

Job applicants - Must be informed of the starting salary or range of starting salaries for the position in question and the applicable collective agreement provisions prior to salary negotiations.

Employees - Have the right to be informed in writing of their own salary level and the average salary level of employees in the same employee category, broken down by gender.

Trade unions - There must be cooperation with trade unions covered by collective agreements in the work of salary surveys, salary reporting, the formulation of job evaluations and in remedying unjustified salary differences. Cooperation may also be necessary with trade unions that do not have a collective agreement with the employer.

The main requirements of the new Pay Transparency Directive

Annual pay survey

The pay survey must include a breakdown of the proportion of male and female employees performing equal work and work of equal value, the average pay and pay gap for each category of employee by gender, and an analysis of pay trends for employees on parental leave or leave to care for dependants.

Wage reporting to the DO

Employers with at least 250 employees must submit a salary report to the DO by 7 June 2027, and every year thereafter. Employers with 150-249 employees must report every three years from the same date, while employers with 100-149 employees must also report every three years but no later than 7 June 2031.

The pay report must contain information on gender pay gaps, median pay gaps, the proportion of women and men receiving pay supplements or variable remuneration, and the proportion of women and men in each pay quartile.

New rights and prohibitions

Employers are not allowed to ask a job applicant about their past or current salary. Information to employees about their salary level and the average salary level of employees in the same category of workers, broken down by gender, must be provided as soon as possible and at the latest within two months of receiving the request. In addition, the employer must inform employees annually of their right to receive this information.

Timetable and implementation

1 June 2026: Proposed date for implementation in Swedish law.

7 June 2027: Deadline for the first payroll reporting to the DO for employers with at least 150 employees.

7 June 2031: Deadline for the first payroll reporting for employers with 100-149 employees.

If the pay gap in any employee category is greater than 5%, it must be justified or remedied. If justification cannot be provided and the pay gap is not remedied within six months, the entire pay survey must be submitted to the DO.

Why is it important?

The Directive is an important part of the work towards gender equality and equal pay for equal work. It provides employees and trade unions with powerful tools to detect and combat gender discrimination in pay. For employers, it is about compliance, but also about creating a fair and transparent workplace that attracts and retains skilled employees.

The new rules also provide for stricter sanctions in case of non-compliance. Employers who violate the rules on information and transparency may be liable to pay damages. Those who do not report to the DO as required may be required to pay penalties. In addition, the limitation period will be extended from two to three years, giving employees more time to take legal action.

What should you do now?

To prepare yourself, the following actions are recommended:

1. Examine pay bands - identify categories of workers where the gender pay gap is close to or greater than 5%.

2. Review your organisation's pay system, pay criteria and recruitment practices - ensure that pay decisions are well documented and justified on the basis of objective and gender-neutral criteria

3. Train managers, HR managers and HR