Denmark prepares to implement the EU Pay Transparency Directive

The Danish government has published a bill aimed at implementing the European Union Pay Transparency Directive by 1 January 2027. While several provisions incorporate the minimum standards, Denmark has chosen to enhance others, such as extending certain pay gap reporting obligations to employers with at least 50 employees (the minimum standard is employers with at least 100 employees).

Background

The European Union Pay Transparency Directive (Directive (EU) 2023/970, the “EU Directive”) entered into force on 6 June 2023 and requires each EU member state to transpose its provisions into their national law by 7 June 2026. The EU Directive sets minimum standards to strengthen pay transparency, promote equal pay for equal work, and impose gender pay gap reporting obligations on employers. While Member States must meet these minimum standards, they are also free to go beyond them, meaning national approaches to pay transparency may vary across the EU. (See Lockton article here (opens a new window) for more details on the EU Directive and creating a roadmap for compliance).

The bill (the “Bill”), which proposes transposing the EU Directive through amendments to the existing Equal Pay Act, was published on 26 February 2026 for public consultation, which closed on 27 March 2026. As the Bill is still at the preliminary stage of the legislative process, it remains subject to amendments. The Danish government intends to implement the EU Directive by 1 January 2027, which is past the implementation deadline of 7 June 2026.

Key details

Key details for employers to note include the following:

Pay structures

The EU Directive requires employers to categorize employees that carry out equal or equivalent work through the establishment of pay structures.

Denmark currently uses the DISCO-08 (opens a new window) job classification system to compare employees with the same job functions. However, the Bill’s notes clarify that this will often be insufficient as the categorization of employees under the EU Directive includes employees performing work of equal value and this will be specific to the individual company.

As such, in line with the EU Directive, the Bill sets out that all employers, regardless of size, must establish pay structures to determine the categories of employees. These must be based on objective and gender-neutral criteria, including skills, effort, responsibility, working conditions and, where appropriate, any other factors relevant to the specific job. The criteria and categories of employees shall be determined with the employee representative, where one exists.

Pre-employment

The Bill introduces the following pre-employment obligations for all employers, regardless of size, which are in line with the minimum standards under the EU Directive:

• To ensure informed and transparent pay negotiations, employers will be required to provide applicants with the starting pay or pay range, based on objective and gender-neutral criteria, and, where applicable, the relevant provisions of the collective agreement for the position.

  • The Bill’s notes provide examples (in a published vacancy notice, prior to the interview, or otherwise prior to the conclusion of an employment contract) and state that the employer determines how this information is made available.

• Employers will be prohibited from asking applicants about their current or previous salaries.

Employee rights

Under the Bill, employees will be entitled to the following rights, which are in line with the minimum standards under the EU Directive:

• All employers will be required to provide employees with easy access to the objective and gender-neutral criteria used to determine their pay, pay levels, and pay progression.

• All employees will have the right to request information on their individual pay level and the average pay levels, broken down by gender, of the category of employees performing the same work or work of equal value. Employers must provide this in writing within two months of the request and must notify employees annually of this right and the steps to exercise it.

These employee rights would apply to all employers, regardless of size.

The Equal Pay Act already includes an existing provision that employees have the right to disclose information about their own salary, which meets the minimum standard under the EU Directive.

Pay gap reporting obligations

Under the existing Equal Pay Act, employers with at least 35 employees must provide employees with annual gender‑segregated pay statistics on the gender pay gap, if at least 10 employees of each gender perform the same job function (i.e., share the same DISCO code). Employers may compile these statistics themselves or submit pay data to Statistics Denmark (the national statistics authority) or employer organizations for calculation. Employers in the agriculture, hunting, forestry, and fisheries sectors are exempt. Alternatively, with agreement from employee representatives, employers may instead prepare an equal pay report outlining the criteria for determining pay and an action plan to address the gender pay gap.

The Bill proposes replacing these existing obligations with the EU Directive’s pay gap reporting framework. Employers will have to report the following information for the previous calendar year:

1. The gender pay gap

2. The gender pay gap in supplementary or variable components

3. The median gender pay gap

4. The median gender pay gap in supplementary or variable components

5. The proportion of female and male employees receiving supplementary or variable components

6. The proportion of female and male employees in each wage quartile (i.e., the scale in which employees are divided into four equal groups according to their wage level, from the lowest to the highest)

7. The gender pay gap between employees by categories of employees, broken down by basic pay and by supplementary or variable components

Employers with at least 100 employees will submit pay data to Statistics Denmark or employer organizations, which will provide employers a prepared wage report with the required information free of charge. Under specific situations, employers may be required to prepare the report themselves. For example, if the provided report does not match the employer’s own employee categories, the employer must produce item 7 independently. Employers in the agriculture, hunting, forestry, and fisheries sectors with at least 100 employees will be subject to these new obligations.

While the EU minimum standard for pay gap reporting obligations is that they apply to employers with at least 100 employees, the Bill proposes going beyond this by requiring employers with 50 to 99 employees to report items 1 to 6 when at least eight employees of each gender share the same DISCO code. However, employers in the agriculture, hunting, forestry, and fisheries sectors with 50 to 99 employees will be exempt.

The reporting frequency and first report completion due dates would depend on the number of employees as follows:

Employers must confirm the accuracy of the information in the report and submit the report to the Labor Market Institute for Equal Pay within one month of receiving it (or completing it themselves). Reports must also be made available to employees and employee representatives.

If requested by an employee, employers must provide:

• Information for the previous four years, if available, on the gender pay gap between employees by categories of employees, broken down by basic pay and by supplementary or variable components.

• Additional information and explanations for any pay gap, within two months (the EU Directive’s minimum standard is “a reasonable time”) of the request.

Employers must remedy any pay gap that cannot be justified based on objective and gender-neutral criteria within a reasonable time in cooperation with employee representatives.

Joint pay assessments

Employers must conduct a joint pay assessment with employee representatives where all the following apply:

• The report shows a gender pay gap in the average wage level of at least 5% in a category of employees.

• The employer has not justified this difference based on objective and gender-neutral criteria.

• The employer has not corrected this unjustified difference within six months of submitting the report to the Labor Market Institute for Equal Pay.

Employers must implement corrective measures from the assessment within a reasonable time and make the assessment available to employees and employee representatives.

These provisions meet the minimum standards under the EU Directive.

Enforcement

The Bill extends the Equal Pay Act’s existing penalty framework to cover non‑compliance with certain new pay transparency obligations. Specific fine amounts are not defined. Additionally, criminal liability may be imposed under Chapter 5 of the Danish Criminal Code.

Employer action: PREPARE TO ACT

While employers may opt to wait until the legislation is implemented before establishing specific protocols, this will leave little time to act. Employers are strongly recommended to develop a roadmap as soon as possible outlining the steps needed to prepare for compliance, particularly as Denmark has proposed pay gap reporting obligations that are more complex than the minimum standards under the EU Directive. Possible actions employers can start taking are set out in the Lockton article on the EU Directive here (opens a new window).

As the Bill is still undergoing consideration and has yet to be passed, employers should monitor the legislative process. If the Bill changes materially or passes, the Lockton Global People Solutions Compliance Practice will update this article accordingly.

Further Information

Proposal for an Act amending the Equal Pay Act (Implementation of Directive (EU) 2023/970) | Høringsportalen (opens a new window)