Pay transparency trends outside the EU – Shining light on a shadowy subject?

As we have reported, EU member states are on the road towards implementing the Pay Transparency Directive (the “Directive”) into national law ahead of the implementation deadline of 7 June 2026, albeit at different paces and via different approaches. As a reminder, the Directive introduces significant new obligations including:

• assessing categories of workers with a view to complying with reporting and transparency requirements;
• mandatory gender pay gap reporting for employers with at least 100 workers (with reporting dates staggered by employer size);
• a joint pay assessment with workers’ representatives, where pay reporting reveals an unjustified gender pay gap in certain circumstances;
• ensuring criteria for determining pay, pay levels and pay progression are easily accessible, objective and gender-neutral;
• giving job applicants specific information about pay or pay ranges, and banning employers from asking about pay history; and
• responding to worker requests for information about their individual pay and average pay levels. 

The Directive requires member states to put in place harsh penalties for non-compliance, including unlimited compensation for equal pay breaches.

While the Directive does not apply in Great Britain[1] because it was adopted after the end of the transition period following the UK’s exit from the EU, the Directive may be indicative of a shift towards an increased emphasis on pay transparency arising from both wider legal and cultural trends. In this article, we look at how this is manifesting itself outside the EU and ways in which a light is being shone onto a traditionally opaque area, as governments seek to strengthen inclusivity, non-discrimination and gender neutrality in the workplace.

The UK position

Outside of the public sector, certain industries (e.g. education and charity sectors) and certain unionised workforces, it is not uncommon for UK employers to adopt a highly restrictive approach to pay transparency. Job advertisements frequently contain little or no pay information. Remuneration is negotiated on a commercial basis, particularly at a senior level, by reference to factors such as past experience and pay. Employers frequently require employees to keep their pay and bonuses confidential from their colleagues. 

While there are currently limited restrictions on employers setting remuneration based on individual factors, this lack of transparency gives rise to an inherent risk of discriminatory pay practices and therefore equal pay and discrimination claims. Barriers on discussing pay can also become a touchy subject, giving rise to mistrust and suspicion among workers carrying out the same role but who may be subject to different pay arrangements. However, there are provisions in the Equality Act 2010 (designed to improve pay transparency) that prohibit pay secrecy clauses insofar as they prevent employees from discussing or disclosing pay for the purposes of establishing if there is pay discrimination.  

Certain employers in the UK may have legal obligations under:

• the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (“GPG Regulations”) which require large private and voluntary sector employers to undertake gender pay gap reporting. The GPG Regulations do not go as far as the Directive, including in relation to: headcount thresholds for reporting; reporting by category of worker; requirements to address identified pay gaps; and areas of pay to be reported upon. To date, the GPG Regulations are generally viewed as not having been particularly effective in assisting with closing the gender pay gap, not least in light of an absence of effective enforcement mechanisms. However, to help further close this gap, the incoming Employment Rights Bill will require employers with 250+ employees to publish gender equality action plans (alongside their gender pay gap report), with penalties for failing to comply; and
• in due course, new legislation covering mandatory ethnicity and disability pay gap reporting for large employers. This remains at the consultation and legislative development stage, with implementation expected in 2026 at the earliest.

However, we anticipate more extensive requirements may be introduced, particularly as the government considers how it should react to the implementation of the Directive. Among other things:

• the Directive is likely to be viewed by employees as the benchmark approach and failure to put in place equivalent provisions may give the perception of a less open and transparent job market, potentially affecting competitiveness;
• multinational employers with a presence in both the UK and EU are already likely to need to consider whether to harmonise their approach to pay gap reporting to reflect the requirements of the Directive, particularly where there is a high degree of international integration, with a view to simplifying their internal processes and ensuring consistency of approach between workplaces; and
• on 7 April 2025, the government pushed a call for evidence on potential equality law reform, which sought views on improving pay transparency. This suggests that the government might be considering similar pay transparency measures to those in the Directive, including: information to be included in job adverts; regulating disclosures of salary history; provision of pay information to employees; and mandating actions to deal with equal pay breaches. Consideration is currently being given to whether such measures would be effective in addressing pay disparity, particularly given the large administrative burden they are likely to place on employers. By way of example, any rules around providing information about the pay of others doing the same role or work of equal value would be especially onerous, as it would require employers to categorise workers according to which jobs would be regarded as “of equal value”, something that is not currently done in most private sector organisations. 

Furthermore, a number of commentators have suggested that Gen Z's demand for pay transparency is having an effect on the UK job market, with many younger workers avoiding job adverts that are not forthcoming on matters of pay and placing a higher level of importance on transparency, including the ability to discuss salaries with colleagues or on social media platforms (e.g. Glassdoor). As the UK continues to face cost-of-living pressures, it is perhaps no surprise that workers entering the job market are keen to gain a greater visibility on matters of pay, to promote fairness and career progression. Studies and market surveys also demonstrate that job posts with salary ranges generate more clicks and applications, which may be beneficial for employers, albeit potentially at the expense of commercial discretion over matters of pay.

Outside the UK

USA: 

There has been a rapid development of state level pay transparency requirements in the USA over the last 10 years, with 14 states now having in place pay transparency legislation or being in the process of enacting such legislation, with a view to reducing discrimination and inequality. Most other states have now also proposed similar pay transparency legislation.

APAC: 

• Unlike the EU, UK and USA, most Asian jurisdictions currently have no wide-ranging pay transparency laws, focusing instead on pay equity. China, Hong Kong, Japan, Singapore and South Korea maintain "equal pay for equal work" provisions but for the most part do not have significant transparency requirements. In Hong Kong, for example, salary information remains highly confidential, with non-disclosure clauses commonly included in employment contracts. However, there are signs of regional shift:
• Singapore has implemented certain requirements around disclosure of salary ranges in job advertisements, albeit limited to those for foreign workers requiring work visas.
• Japan and South Korea have also introduced regulatory requirements for larger employers to report gender pay gaps, albeit again these measures fall short of the transparency obligations seen in Europe.
• In November 2025, South Korea's Ministry of Gender Equality and Family announced plans to introduce a "pay transparency for equal employment system" publicly disclosing wage data by job category, gender, and employment type.
• Australia has taken a more progressive approach through amendments to the Fair Work Act in 2022, prohibiting pay secrecy clauses in contracts and granting employees an express right to disclose their remuneration. Employers with at least 100 employees must also lodge annual Gender Equality Reports with the Workplace Gender Equality Agency, containing information on gender pay gaps and related workplace policies.

A global shift?

Whether or not inspired by the EU’s transformative pay transparency rules in the Directive, there appears to be a reasonably steady global shift towards greater pay transparency, as governments seek to strengthen established legal principles of equality and non-discrimination (whether by reference to gender or other personal characteristics) and respond to increasing cultural and workplace expectations around openness and fairness. However, this will inevitably give rise to friction in the marketplace, given the inclination of employers in certain sectors and industries towards pay opacity and keeping remuneration within the shadowy sphere of individual and confidential commercial negotiation.  For many employers, this shift in approach will be challenging.