EU Pay Transparency Directive: Where Does Malta Stand and What Should Employers Be Doing?
Directive (EU) 2023/970 (the “Directive”) was adopted in May 2023 to strengthen the principle of equal pay for equal work or work of equal value between men and women and promote greater transparency in remuneration structures across the EU.
The Directive has now been implemented in Malta through the Equal Pay (Transparency and Reporting) Regulations, 2026 (the “Regulation”), building on earlier measures introduced by Legal Notice 112 of 2025. The new framework introduces a comprehensive set of obligations aimed at enhancing pay transparency, strengthening enforcement, and reducing pay disparities in practice.
Where does Malta stand?
The Maltese framework now introduces a number of key obligations, including:
Obligation to provide salary information prior to engagement;
Prohibition on requesting salary history from candidates;
Employee’s right to request individual and average pay level;
Requirement to implement objective, gender-neutral pay structures; and
Introduction of pay gap reporting obligation for employers.
In addition, the Regulation introduces a shift in the burden of proof in discrimination claims and expands compensation rights.
What should employers be doing?
Align recruitment practices – Applicants are entitled to receive information on the initial pay or pay range prior to engagement and employers are prohibited from requesting an applicant’s current or previous pay history. In addition, job vacancy notices and job titles must be gender-neutral, and recruitment processes must be conducted in a non-discriminatory manner.
Implement clear pay structures – Employers should ensure that pay is determined on the basis of objective, gender-neutral criteria, supported by clear and accessible policies on pay levels and progression. While full pay progression transparency requirements apply to employers with 50 or more employees, those employing 25 or more employees must still internally document the criteria used to determine pay and progression.
The Regulation does not preclude differences in pay or the establishment of pay progression, provided such differences are justified on the basis of objective, gender-neutral and bias-free criteria, including performance, competence, skills, effort, responsibility, working conditions and, where appropriate, soft skills.
In assessing comparability for equal pay purposes, the analysis is not limited to workers employed at the same time, hence employers should ensure that pay structures and decision-making processes remain consistent and justified over time.
Prepare for pay information requests – Employers should ensure that appropriate procedures are in place to handle requests for pay information, including individual pay levels and average pay levels, broken down by sex for comparable categories of workers. Employees may also request further clarifications where the information provided is incomplete or unclear.
Employers are required to provide this information in writing within eight days of receipt. Where an employer fails to respond within this timeframe, employees may escalate the request through employee representatives or the relevant Equality Body. Failure to comply may constitute an offence.
Employers must also inform employees annually of their right to request such information and retain relevant data for at least five years. Internal systems should therefore be in place to ensure that requests are handled efficiently and in compliance with the applicable legal requirements.
Ensure readiness for pay gap reporting – For employers with 100 or more employees, the Regulation introduces mandatory pay gap reporting obligations, subject to phased timelines. Employers with 150 or more employees will be required to report from June 2027, based on data collected from 1 January 2026 onwards, while smaller employers will follow at a later stage.
Reports must be formally confirmed by management, following consultation with employees’ representatives. Where unjustified pay gaps of 5% or more are not remedied within the prescribed timeframe, employers may be required to carry out a joint pay assessment. Internal processes should therefore be sufficiently robust to support both reporting and any required corrective measures.
How can we assist?
We assist employers in navigating the legal implications of the EU Pay Transparency Directive and its implementation under the Equal Pay (Transparency and Reporting) Regulations, 2026, including:
advising on compliance with Maltese requirements;
reviewing employment policies from a legal risk perspective;
assisting with pay information requests;
assessing exposure arising from pay disparities and potential claims; and
advising and assisting in litigious disputes.
Conclusion
Employers should undertake a targeted review of their current practices against the requirements of the Regulation, including pay structures, progression criteria, and transparency obligations. This includes ensuring that objective, gender-neutral criteria are applied in practice, that required documentation is in place and accessible, and that internal systems can support pay information requests and reporting. Any identified gaps should be addressed promptly to mitigate legal exposure.
Employers who fail to align their practices risk exposure to employee claims, regulatory scrutiny, and penalties, including claims for full recovery of back pay and compensation. Such claims may be brought within a three-year period, running from when the claimant knew or could reasonably have been expected to know of the breach. Non-compliance may also result in fines ranging from €2,500 to €7,000. In addition, where there is prima facie evidence of a breach of the principle of equal pay, employees may seek interim orders requiring the cessation of an alleged infringement or the adoption of corrective measures pending final determination.
Given that these obligations are underpinned by data and internal structures, compliance must be treated as an immediate priority and cannot be implemented retrospectively.
