Finland prepares to implement the EU Pay Transparency Directive

The Finnish government has published a proposal aimed at implementing the minimum standards under the European Union Pay Transparency Directive, with implementation expected in late 2026 or early 2027.

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 proposal (the “Proposal”) was published on 16 May 2025 for public consultation, which closed on 9 February 2026. It closely incorporates the minimum requirements of the EU Directive. As it is still at the preliminary stage of the legislative process, it remains subject to amendments. Although the Finnish government originally intended to implement the legislation by 18 May 2026, the legislative process has been delayed, and implementation is now expected later in 2026 or potentially in early 2027.

Key details

Key details for employers to note include the following:

Pay structures

A key concept under the Directive, to respect the right to equal pay, is the categorization of employees that carry out equal or equivalent work through the establishment of pay structures.

In line with the Directive, the Proposal sets out that all employers, regardless of size, must have pay structures to determine the categories of employees that carry out equal or equivalent work. These pay structures can be structures set out in applicable collective agreements or other structures decided by the employer. In all cases, they must be based on objective and gender-neutral criteria including qualifications, effort, responsibility, working conditions, and where appropriate, other factors relevant to the job in question.

The Equality Unit of the Ministry of Social Affairs and Health is expected to develop analytical tools and methods to support employers in establishing these pay structures.

Pre-employment

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

• Employers would be required to provide information to jobseekers on the starting pay or pay range, based on objective and gender-neutral criteria, and, where applicable, the relevant provisions of the collective agreement applicable for the position. This information must be provided ahead of time (e.g., in the job advertisement, before the job interview, or otherwise) to ensure informed and transparent wage negotiations.

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

• The recruitment process must be conducted in a non-discriminatory manner.

• Job advertisements and job titles must be gender-neutral.

Employee rights

Under the Proposal, 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 the criteria used to determine their pay and pay levels in an easily accessible form.

• Employers with at least 50 employees must also provide employees with the criteria used to determine pay progression in an easily accessible form. As the EU Directive permits Member States to exempt employers with fewer than 50 employees from this obligation, Finland has chosen to implement this exemption.

• 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. The employer must provide this information in writing within a reasonable time and no later than two months of the request. Employers must also notify employees annually of this right and the steps to exercise it.

• Employees cannot be prevented from disclosing their wages.

These employee rights would apply to all employers, regardless of size. The only exception is the right to access criteria for pay progression, which only applies to employers with at least 50 employees.

Pay gap reporting obligations

Under the Gender Equality Act, Finland currently requires employers with at least 30 employees to prepare a gender equality plan every two years. This plan must include:

• An assessment of the gender equality situation in the workplace.

• A pay survey, including details of the employment of women and men in different jobs and a survey concerning the classification of jobs, the pay for those jobs and the differences in pay.

• Measures for promoting gender equality and achieving equality in pay.

• A review of how measures under the previous plan have been implemented and the results achieved.

More information on the obligation to prepare a gender equality plan can be found on the Ministry of Social Affairs and Health’s website here (opens a new window).

As the obligation to prepare a gender equality plan does not include the reporting of the specific pay gap information that the EU Directive requires, the Proposal does not abolish it but proposes additional provisions to meet the EU Directive’s minimum standards. The new obligations would depend on the number of employees as follows:

Finland has chosen not to impose these pay gap reporting obligations on employers with fewer than 100 employees. However, these employers may choose to report voluntarily.

Employers would be required 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, basic pay and supplementary or variable components

As employers are already required to submit wage payment data to the government’s Incomes Register, Finland has proposed that its national statistics office compile the pay gap report for items 1 to 6 in the above list based on such data. This is intended to reduce the burden on employers. However, as item 7 cannot be calculated purely based on the data reported to the Incomes Register, employers will be required to calculate this information and report it separately to the Incomes Register. Additionally, the employer must still confirm the accuracy of all the information reported after consulting employee representatives.

Employers must provide employees with information on the gender pay gap between employees, broken down by categories of employees, basic pay and supplementary or variable components. If requested by an employee:

• The employer must provide this information, if available, for the previous four years.

• The employer must, within a reasonable time, provide additional information and reasons for the pay gap.

The employer must remedy any pay gap that cannot be justified based on objective and gender-neutral criteria within a reasonable time and within six months at the latest, in cooperation with employee representatives and, if necessary, with the Ombudsman for Equality.

Joint pay assessments

Employers would be required to 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 reporting the gender pay gap between employees, broken down by categories of employees and by basic pay and by supplementary or variable components.

The joint pay assessment would aim to identify, correct and prevent unjustified pay differences between employees. While the EU Directive does not mandate a deadline for the submission of the assessment, Finland has chosen to impose a deadline. The employer must submit the assessment to the Ombudsman for Equality within 12 months of reporting the gender pay gap between employees, broken down by categories of employees and by basic pay and by supplementary or variable components. The assessment must also be available to employees and employee representatives.

While the EU Directive’s minimum requirement is that employers must correct the unjustified pay differences by implementing the measures from the assessment within a reasonable time, the Proposal adds a time-specific deadline of six months at the latest for this obligation.

These provisions meet the minimum standards under the EU Directive.

Enforcement

Most of the enforcement provisions set out in the Proposal aim to extend Finland’s existing framework under the Equality Act to enforce the new pay transparency obligations. However, the Proposal introduces a new default fee of between EUR 5,000 to EUR 80,000 that may be imposed by the Ombudsman for Equality for non-compliance with joint pay assessment obligations.

Employer action: PREPARE TO ACT

As the Proposal is still undergoing consideration and has yet to be passed, employers should monitor the legislative process. Additional regulatory guidelines are also expected to be drafted to implement certain provisions.

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. Possible actions employers can start taking are set out in the Lockton article on the EU Directive here (opens a new window).

If the Proposal changes materially or passes, the Lockton Global People Solutions Compliance Practice will update this article accordingly.

Further Information

Working group's proposal for the implementation of the Pay Transparency Directive is progressing | Valtioneuvosto (opens a new window)