Fair and transparent wages: A challenge and an opportunity for employers

Legislation and the principle of equal pay

The principle of equal pay for men and women has been enshrined in Czech and European law for several decades. European legislation first incorporated it in 1957, and in 2006, the rules for equal pay were further specified by an EU directive. In 2023, the European Parliament approved the new Directive 2023/970, which strengthens the application of the principle of equal pay for men and women for the same work or work of equal value through pay transparency and enforcement mechanisms. Member States are required to implement it into their legal systems by June 2026.

The directive introduces some new obligations for employers, such as greater transparency in remuneration. Companies with more than 150 employees will be required to report on pay differences between men and women as early as 2026. Employers will have to inform applicants of the starting salary or salary range for a given position before negotiations on that position begin. Employees will be entitled to access more information about remuneration principles and the financial range of salaries for work of equal value.

How should employers prepare?

The current Labour Code already takes into account equal treatment and the prohibition of discrimination (Section 16) and the principle of equal pay for equal work or work of equal value (Section 110). However, employers are waiting for the actual implementation of the directive and detailed methodology for the individual obligations it introduces – e.g. how and in what form remuneration reports will be submitted, what indicators employers will be required to publish, and what analytical tool will be recommended for calculating the GPG.

According to the directive, companies with more than 150 employees are required to submit a remuneration report for 2026 by June 2027 and must have the relevant data, HR system and internal guidelines in place to ensure transparent remuneration. This requires high-quality and timely systematic preparation. It is necessary to start now, as companies with more than 250 employees will already be reporting data for the 2026 calendar year. We are pleased to see that our clients are preparing responsibly for their new obligations and are beginning to put the new principles into practice.

Overview of reporting obligations:

• Employers with 250 or more FTEs^* by 7 June 2027, then annually
• Employers with 150-249 FTEs by 7 June 2027, then every 3 years
• Employers with 100-149 FTEs by 7 June 2031, then every 3 years 

^{*FTE stands for Full-Time Equivalent. It is mainly used in HR, finance and project management to express working hours in full-time equivalents.} 

Impact on employees

The new directive should bring greater fairness to workplaces and ensure transparency in remuneration. Greater awareness should then enable employees to better defend their rights and contribute to creating a fairer working environment.

Employees now have the right to obtain information about their level of remuneration and the average remuneration of colleagues in the same or comparable positions, including a breakdown by gender.

Documentation in supply chains

In practice, we are increasingly seeing customers requiring suppliers to prove that they remunerate their employees fairly, regardless of gender, and that the entire remuneration system is transparent. We are also seeing a new trend of making participation in tenders conditional on a verified equal pay report.

Equal-Salary certification

Companies can also apply for EQUAL-SALARY certification, which is an internationally recognised certification based on a thorough scientific approach and a four-phase methodology based on ISO 9000 quality standards. The certificate is issued by the Swiss EQUAL-SALARY Foundation, an independent non-profit organisation that promotes equal pay and equal opportunities for women and men in companies around the world. Any organisation with at least 50 employees, including at least 10 women, can apply for this certification. As a recognised partner of the Swiss EQUAL-SALARY Foundation, Forvis Mazars will guide you through the entire process.

Forvis Mazars has included equal pay services in its portfolio of HR services. We have a team of experts who perform payroll audits and review remuneration systems. We are able to issue an Independent Expert Report certifying that the company remunerates its employees fairly. In addition, as partners of the Swiss EQUAL-SALARY Foundation, we will help you obtain certification. If you are interested in this topic, please do not hesitate to contact us using the contact details below.

Author: Martina Kučerová