Pay Transparency: From Regulatory Compliance to Strategic Compensation Management

The key provisions of Greek Law 5316/2026, which transposes Directive (EU) 2023/970 on pay transparency into Greek law, come into effect on 1 November 2026.

For many businesses, the initial response is to treat the legislation as yet another compliance exercise: a report, a policy, or an additional field in job advertisements.

Our experience suggests that this approach is not enough.

Law 5316/2026 serves as both a test of organisational readiness and a catalyst for HR transformation. It goes beyond introducing new reporting obligations. It calls for a fundamental reassessment of how jobs are structured, how compensation is determined and documented, how pay decisions are made, and how HR data is managed and leveraged.

What changes in practice?

The legislation extends well beyond reporting requirements, affecting the entire employee lifecycle, from recruitment to the management of potential pay disparities:

Recruitment. Job applicants are entitled to receive information about the initial pay or pay range at a stage that allows for informed and transparent pay negotiations, before the interview or, where no interview takes place, before entering into an employment contract. Employers are also prohibited from asking candidates about their pay history (Article 41 of the Greek Labour Code).

Pay structures and progression. Employers must establish documented pay structures based on objective criteria, including skills, effort, responsibility and working conditions. They must also make the criteria used to determine pay and pay progression accessible to employees (Article 37 of the Greek Labour Code).

Employee information rights. Employees have the right to request, in writing, information about their individual pay level and the average pay levels, broken down by gender, of colleagues performing the same work or work of equal value. Employers must respond within two months (Article 56A of the Greek Labour Code).

Reporting obligations. Companies with 150 or more employees must submit their first gender pay gap reports by 7 June 2027, while those employing between 100 and 149 people must report by 7 June 2031 (Article 56B of the Greek Labour Code). The first reporting period runs from 1 November to 31 December 2026, as clarified by Circular 26923/07.10.2026 issued by the Greek Ministry of Labour and Social Security.

Addressing pay disparities. An unexplained pay gap of at least 5% within any category of workers, which remains unremedied for six months, triggers a joint pay assessment with workers' representatives (Article 56C of the Greek Labour Code).

These requirements are accompanied by a significantly strengthened enforcement framework, including administrative penalties, the right to full compensation without a predefined upper limit and, under the conditions set out in the law, a shift in the burden of proof to the employer.

In practice, it is no longer sufficient for employers to believe that a difference in pay is justified. They must also be able to demonstrate and document the objective reasons behind it.

The challenges businesses are facing

Discussions at HR NEXT #2 confirmed that significant questions remain regarding the practical implementation of the legislation in the Greek business environment.

Many HR functions do not yet have a complete picture of the actions required. Three challenges consistently emerge:

1. Lack of a consistent job architecture

Without clearly defined job families, levels and gender-neutral job evaluation methodologies, the principle of "work of equal value" cannot be effectively applied.

Job titles have often evolved over time and do not necessarily reflect the actual responsibilities or requirements of each position.

2. Pay decisions without sufficient documentation

Salary increases, bonuses and starting salaries are frequently determined on a case-by-case basis, without clearly documented criteria.

With the burden of proof shifting to employers under the applicable legal conditions, decisions that cannot be objectively explained become a source of risk.

3. Fragmented data

The information required is often scattered across HR information systems (HRIS), payroll platforms, ERP systems, spreadsheets and local files.

Calculating the seven indicators required under Article 56B, using both annual and hourly figures and distinguishing between fixed and variable compensation, requires consistent, reliable and reconcilable data.

The challenge, therefore, is not simply to collect the information needed for the first report.

It is to redesign processes, responsibilities and data flows to ensure that information is reliable, consistent, reproducible and auditable.

From compliance to strategic compensation management

The objective is not to pay everyone the same amount.

It is to ensure that pay differences can be consistently explained and supported by objective, gender-neutral criteria and appropriate documentation.

Achieving this requires four essential foundations:

A structured job architecture, with job evaluations based on skills, effort, responsibility and working conditions. A useful starting point is the European Institute for Gender Equality (EIGE) toolkit for gender-neutral job evaluation and classification, which the legislation identifies as an available resource without making its use mandatory.

Structured compensation decisions, supported by documented pay ranges, clear progression criteria and an auditable record of the rationale behind each decision.

A single source of truth for pay transparency data, integrating HRIS and payroll information and enabling consistent, repeatable calculations.

Effective governance, with clear ownership and accountability across HR, Finance and senior management. This is particularly important given that the accuracy of reported data must be confirmed in writing by management (Article 56B, paragraph 5 of the Greek Labour Code).

Businesses that establish these foundations gain more than regulatory compliance.

They strengthen payroll cost control, improve the credibility of compensation decisions, enhance their employer brand and position themselves more competitively in the talent market.

A practical three-step roadmap

The key is to translate the legislation into a structured implementation plan before the first reporting deadline or employee information request arises.

We recommend three steps:

1. Assess

Conduct a readiness assessment against the requirements of Law 5316/2026, map existing data sources and perform a preliminary "shadow" gender pay gap analysis to identify employee categories where pay differences exceed 5%.

2. Design

Develop a consistent job evaluation and classification framework, define pay ranges and progression policies, establish procedures for responding to employee information requests, and create a data model with clearly assigned ownership and accountability.

3. Implement

Update job advertisements and recruitment processes, train managers, establish annual employee communication procedures, introduce corrective measures where necessary and prepare for the first reporting cycle.

For businesses with 150 or more employees, time is limited.

The first reporting period is already underway, meaning that the data required for June 2027 is being generated today.

For smaller businesses, obligations relating to recruitment, pay-setting criteria and employee information rights have already applied since 1 November 2026, regardless of workforce size.

Transparency as a framework for better decision-making

Pay transparency is more than a new legislative obligation.

It is a test of organisational readiness and an opportunity for HR functions to move beyond fragmented processes and disconnected data towards an integrated, consistent and well-documented decision-making framework.

Businesses that act early will not simply be preparing for their first report or employee information request.

They will be building the capability to explain, justify and support their compensation decisions through reliable data and objective criteria.