Finland: Transposition of the EU Pay Transparency Directive

Employer Action Code: Act

The Finland government has released a draft bill to transpose EU Directive 2023/970 on Pay Transparency for consultation. The directive aims to strengthen enforcement of equal pay for equal work and address gender pay gaps that persist in all EU member states. In Finland, average gross earnings for women in the private sector were 17% less than those of men in 2023 (Eurostat data).

Key details

The draft bill, prepared by a tripartite working group, would introduce the following changes to existing legislation:

• Pay transparency before employment: Employers would need to share with job applicants the initial salary or pay range for the position and any relevant collective bargaining agreement provisions on salary. This information would not need to be included in the job postings but should be provided in reasonable time to allow for informed negotiations on pay. Employers would not be allowed to inquire into job applicants’ prior salary histories
• Transparency on pay setting: Employers would be required to inform employees about the criteria used to set wage levels. In addition, companies with 50 or more employees would need to make accessible the criteria used to determine employee salary progression
• Transparency on pay levels: Employees would have the right to information on their individual pay level and average pay levels for workers performing equal work, broken down by gender. Employers would need to provide the information within two months of the employee’s request
• Reporting of gender pay gaps: Companies with 100 or more employees would be required to calculate and report gender pay gaps at entity and employee grouping levels during the calendar year for their workforce to Statistics Finland, which would then forward the information to the Equality Ombudsman. Employers would also need to report internally to their workforces and employee representatives the pay gaps by groupings of employees performing equal work. The employer would need to address within six months any pay gaps that could not be justified on objective criteria. If the unexplained pay gap is 5% or more, the employer would be required to conduct a pay analysis in cooperation with employee representatives to eliminate any unexplained differences in pay by gender

Employer implications

The draft bill is expected to be sent to Parliament by fall 2025, with a planned implementation date, if passed, on May 18, 2026. More than one member of the tripartite working group that developed the draft bill did not approve the final text. In addition, multiple employer associations have come out against the bill, arguing that it is more expansive than the government originally promised, with provisions that exceed the directive mandates; therefore, it is likely that the exact timeline for passage and contents of the bill may change. Employers should monitor the legislative process closely.