What is pay transparency?

Pay transparency is the practice, increasingly required by law, of being open about compensation: publishing salary ranges in job postings, disclosing pay scales to employees, and reporting on gender pay gaps. The goal is to surface and close unjustified pay differences, particularly between men and women doing equal work.

What does the EU Pay Transparency Directive require?

The directive (2023/970) sets a transposition deadline of 7 June 2026 for member states. Its core obligations include disclosing a salary range before or at the start of hiring, banning questions about candidates' salary history, giving employees the right to request gender-disaggregated pay data for their role, and staggered gender pay gap reporting for larger employers. Exact rules and timelines vary by country as each transposes the directive into national law, so verify your specific jurisdiction.

Do US companies have to post salary ranges?

In a growing number of states and cities, yes. Jurisdictions including California, Colorado, New York, Washington, and others require salary ranges in job postings, with the specifics differing by location. There is no single federal rule, so the requirement depends on where the role is based or, in some laws, where the company operates. Confirm the current rules for each location you hire in.

How should a company prepare for pay transparency?

Audit your pay structure for unjustified gaps before you are required to publish anything, define clear and defensible salary ranges for each role, train hiring managers on what they can and cannot say, write a pay transparency approach into policy, and make sure job postings and offer letters are consistent with it. The audit is the part to start now, because gaps are easier to fix before they are public.

Is pay transparency good for employers?

Beyond compliance, transparency tends to speed up hiring (candidates self-select on range), reduce offer-stage friction and renegotiation, and build trust. The cost is the discipline it forces: you cannot publish ranges you cannot defend, which means doing the pay-equity work. Most employers find that work was overdue regardless.

Employee onboarding

Pay Transparency in 2026: What Employers Need to Know

Sakha TeamJune 5, 202610 min read

Pay transparency is the shift, now backed by law on both sides of the Atlantic, toward being open about compensation: salary ranges in job postings, pay scales available to employees, and gender pay gap reporting. For employers it has moved from a values question to a compliance deadline, and 2026 is the year it gets real for a large share of companies. This guide covers what is actually required, what is coming, and what to do about it. (General information, not legal advice; confirm specifics for your jurisdiction with counsel.)

Why 2026 is the inflection point

The single biggest driver is the EU Pay Transparency Directive (2023/970), which sets a deadline of 7 June 2026 for member states to transpose it into national law. The rollout is uneven (some countries have moved early, others are running late, and exact national rules differ), but the direction is fixed: the European Commission has held the deadline firm rather than allowing a delay. Any company hiring in the EU needs to know the status in each country it operates in.

In the US, the trend has been building state by state for years. A growing list of states and cities now require salary ranges in job postings, and the practical effect for any multi-state employer is that transparency has become the default, because complying in the strictest jurisdiction is usually simpler than maintaining different practices per location.

What pay transparency actually requires

The specifics vary, but the obligations cluster into a few categories:

Obligation	What it means in practice
Pay ranges in postings	Publish a salary range on the job ad, or disclose it early in hiring
No salary history questions	You cannot ask what a candidate currently earns (in many jurisdictions)
Right to pay data	Employees can request pay information for their role and comparators
Gender pay gap reporting	Larger employers report gaps, with unjustified gaps triggering action
Equal pay for equal value	Pay differences for equivalent work must be objectively justifiable

The part that catches employers out

Transparency does not create pay inequity; it reveals it. The hard work is not publishing a number, it is being able to defend the number. A company that has never run a pay-equity audit may discover, the moment ranges go public, that two people doing the same job are paid very differently for reasons nobody can explain. That is a legal and morale problem that was always there, now visible to everyone.

So the real preparation is internal and starts well before any publishing deadline: audit current pay for unjustified gaps, define clear and defensible ranges for each role, and decide the reasoning that explains where someone sits in a range. The publishing is the easy last step.

What to do now

Run a pay-equity audit. Find the gaps while they are still private and fixable. This is the urgent one.
Define role-based ranges with a documented rationale for placement (experience, scope, location).
Fix postings and offer letters. Ranges in the posting must match reality and the offer letter; inconsistency between them is its own risk.
Train hiring managers on what they can and cannot say, especially the salary-history ban.
Write it into policy so the approach is consistent, documented, and answerable when employees ask, which they will.

That last step matters more than it looks. The day ranges go public is the day employees start asking why they sit where they sit, and "the policy is unclear and nobody can find it" is the worst possible answer. A written, findable pay transparency approach, sitting alongside your other policies, turns a wave of anxious questions into self-serve answers.

How Sakha helps

Sakha's policy generator drafts a clear pay transparency policy structured for your jurisdiction and company, and its policy review checks existing comp and pay policies for the vague language that creates disputes. When you publish, the policy goes straight into your knowledge base, so when transparency rules prompt the inevitable questions (how are ranges set, what is the policy on raises, can I see the band for my role), employees get a consistent, sourced answer in Slack instead of flooding HR. New hires get the comp framework explained during onboarding, in context. Sakha does not run your pay-equity audit, that is your work with counsel, but it makes the policy that surrounds it clear, consistent, and answerable.

Curious how Sakha runs onboarding inside Slack? See how it works.