The EU Pay Transparency Directive: What Global Mobility Leaders Need to Know

The EU Pay Transparency Directive marks one of the most significant developments in employment law in recent years. Its objective is straightforward: strengthen equal pay between women and men and help close the gender pay gap through greater transparency and accountability.

EU Member States were required to incorporate the Directive into national law by 7 June 2026. However, implementation across the European Union remains uneven. Even so, multinational employers should begin assessing the impact now rather than waiting for all national rules to be finalised.

While much of the discussion focuses on domestic workers, organisations with internationally mobile workforces face several unique challenges.

Greater Pay Transparency Means Greater Scrutiny of International Compensation

The Directive introduces several new rights and obligations, including:

• • • Pay transparency before employment
    • Greater transparency around pay progression and pay-setting mechanisms
    • Employee rights to request information on:
      • • Their pay levels
        • Average pay by gender for workers performing the same work or work of equal value
    • Gender pay gap reporting obligations for qualifying employers

Importantly, the concept of "pay" is broad. It includes:

• • • Base salary
    • Bonuses
    • Allowances
    • Benefits provided directly or indirectly as part of employment

For global mobility programs, this raises important questions.

Expatriates, posted workers, remote workers and other cross-border employees often receive compensation packages that differ significantly from those of local employees. These packages may include:

• • • Housing allowances
    • Cost-of-living adjustments
    • Tax equalisation arrangements
    • Relocation benefits
    • Immigration-related compensation elements

As workers gain greater access to pay information, employers may increasingly need to explain and contextualise these differences. This is likely to bring greater visibility to compensation structures that have historically received limited internal comparisons.

Who Is Responsible for Cross-Border Workers?

The Directive provides limited guidance on cross-border employment structures.

It applies broadly to workers with an employment contract or employment relationship but does not explicitly address how transparency obligations should operate where multiple entities are involved.

This is particularly relevant for:

• • • Intra-corporate transferees
    • Posted workers
    • Temporary agency workers

For example, a posted worker may be employed by an entity in their home-country while performing services for a host entity in a different EU Member State.

It may seem clear that the home-country employer is responsible for:

• • • Job classification
    • Pay structures
    • Responding to pay transparency requests

However, this does not necessarily exclude obligation for the host entity, especially in intra-group transfers.

The Directive also indicates that pay comparisons may not always be limited to workers employed by the same legal entity. This may be particularly important where pay conditions are determined centrally within a corporate group.

For multinational organisations with centralised human resources and compensation functions, this issue may become even more relevant.

Can Mobility-Related Pay Differences Be Justified?

Not all differences in pay necessarily create equal pay concerns.

The Directive recognises that pay differences may be justified where they are based on objective and gender-neutral criteria.

When assessing work of equal value, employers should consider:

• • • Skills
    • Effort
    • Responsibility
    • Working conditions

Internationally mobile workers may have additional responsibilities that justify pay differences such as ongoing home and host country duties.

Other legitimate reasons for pay differences may include:

• • • Immigration salary thresholds
    • Expatriate tax rulings
    • Local market compensation practices

However, employers should ensure that these factors are:

• • • Properly documented
    • Reflected in their compensation governance framework
    • Applied consistently across the organisation

As transparency increases, employers will need to explain the reasons for any pay differences. Consistency will be essential. For example, if two assignees in the same circumstances receive different allowances, that could be challenged.

Why Mobility Teams Should Be Involved

The Pay Transparency Directive is often viewed as a human resource or reward initiative, but global mobility teams will play a critical role in helping organisations comply.

Mobility programs often create pay differences that may not exist in domestic workforces. In addition, the burden of proof in equal pay claims rests with the employer,

As a result, organisations with large, internationally mobile populations should:

• • • Assess whether cross-border workers contribute to gender pay gaps in domestic compensation frameworks
    • Map and categorise their internationally mobile workforce
    • Identify and address unjustified pay differences
    • Update mobility and remote working policies where necessary

Looking Ahead

The relationship between the EU Pay Transparency Directive and global mobility is still evolving. As Member States finalise implementation and provide practical guidance, employers will gain greater clarity regarding how the new rules apply to cross-border workforces.

However, implementation will vary across Member States, particularly in how rules apply to internationally mobile workers. As a result:

• • • A one-size-fits-all approach may not work
    • Employers should continue to monitor requirements on a jurisdiction-by-jurisdiction basis

A similar trend can be seen in the United States, where pay transparency has developed through a patchwork of state laws rather than a single national framework. For example:

• • • New York requires employers to include pay ranges in job postings
    • Maine and Virginia will introduce similar requirements in July

This adds to the complexity for organisations managing roles across multiple locations.

In the meantime, organisations should review their international compensation structures and ensure that any pay differences affecting mobile employees can be supported by objective, gender-neutral and well-documented criteria.

For employers with significant populations of expatriates, posted workers, international remote workers or other cross-border employees, equal pay compliance is becoming an important part of the global mobility agenda.

Collaboration between immigration, employment law, reward, tax and mobility teams will therefore be essential, as many of the pay differences affecting mobile employees originate from immigration and assignment-related requirements rather than from the work itself.

How Fragomen Can Help

Fragomen supports employers in assessing the implications of the EU Pay Transparency Directive for internationally mobile workforces. Fragomen’s team helps organisations review cross-border compensation practices, manage compliance risks and prepare for evolving transparency requirements across jurisdictions.

Need to Know More?

For more information about the EU pay transparency directive, please contact Senior Counsel Jo Antoons at [email protected].   

This blog was published on 1 July 2026 and and reflects information available at that time. Updates may occur as policies evolve. To stay informed on the latest immigration news and analysis, please subscribe to our alerts and follow Fragomen on  LinkedIn, Facebook and Instagram.