Equal Pay: A Practical Compliance Roadmap for Businesses
In our previous article, we examined what changes for businesses under the very recent law on equal pay (Law 5316/2026). The mistake businesses risk making in relation to this law is to confuse the first reporting deadline with the time at which their compliance should begin.
Periodic reporting constitutes only one of the obligations under the new framework and primarily concerns larger businesses. By contrast, the obligations concerning transparency in recruitment, employees’ access to information and the adoption of pay structures based on objective criteria are not limited to such businesses, nor can they be addressed shortly before the first reporting deadline.
Moreover, the reliable production of the required data presupposes months of preparation: common job categories, reliable and comparable data, uniform definitions of pay, documented exceptions and, where necessary, corrective measures.
Compliance must therefore be approached as a combined project involving corporate governance, human resources, payroll, legal support and data protection. The roadmap below sets out the principal steps.
Defining Responsibility and Scope
The first step is to determine who the employer is for each employee, which establishments or branches belong to each legal entity and which companies exceed the thresholds of 100, 150 or 250 employees.
Within groups of companies, it is also necessary to map the entity that effectively determines remuneration. Central approvals, common pay scales or uniform policies may broaden the scope of comparability.
Management must appoint a project leader and a multidisciplinary team. The human resources department cannot—and should not—operate alone: payroll is required for the data, legal advice for the criteria and procedures, the finance department for variable benefits and the Data Protection Officer for the secure processing of data.
Creating a Reliable Job Architecture
The business must record the actual jobs performed, rather than merely the existing job titles.
For each position, an up-to-date job description, required skills, level of responsibility, degree of effort, working conditions and any educational or professional requirements are necessary.
On the basis of these elements, job families and levels are created, within which the same work or work of equal value is classified (Article 8 of Law 5316/2026; Article 37 of the Labour Law Code).
The process must not reproduce stereotypes. For example, responsibility for managing people is not the only form of responsibility; equivalent weight may attach to responsibility for critical systems, regulatory compliance, safety or significant clients.
The assessment must reflect the actual value of the work and must be applied in the same manner to everyone.
Mapping Total Remuneration
The analysis must cover all benefits: fixed remuneration, bonuses, commissions, overtime, allowances, benefits in kind, company cars, vouchers, private insurance, pension contributions, stock options or other long-term benefits.
The business must agree on a common “dictionary” of terms so that all departments and all companies within the group use the same definitions.
Particular attention is required when converting the data onto a comparable basis. Full-time and part-time employment, recruitment or departures during the year, leave, changes in working hours and extraordinary benefits may distort the results unless calculated using a consistent methodology.
Internal Review of Pay Differences
Before any formal reporting, the business should conduct a trial review.
The overall and overall median pay gap should be calculated, together with the gap and median gap in variable remuneration, the percentage of employees by sex receiving variable remuneration, the distribution of employees across pay quartiles and the differences within each category of employees.
The causes should then be identified: experience, performance, scarce skills, responsibility, seniority, geographical market or another objective factor.
The existence of a reason is not sufficient; the reason must be gender-neutral, proportionate and supported by current evidence.
A performance assessment that was never recorded in writing or “particular value” that is not defined by criteria does not constitute strong documentation.
Where the difference cannot be justified, a corrective plan is required before it develops into an individual claim or triggers a mandatory joint pay assessment.
Redesigning the Recruitment Process
Job advertisements and recruitment procedures must be adapted immediately.
For each position, an approved pay level or pay range is required, based on the value of the position rather than the candidate’s previous salary.
Interviewers must be trained not to request salary history and to use gender-neutral language (Article 9 of Law 5316/2026; Article 41 of the Labour Law Code).
Any offer outside the approved range must be subject to specific approval and accompanied by a specific justification.
Otherwise, exceptions accumulate and transform the entire system into a collection of individual arrangements that the business will find difficult to defend.
Procedure for Employee Information Requests
The business needs a clear internal procedure for employee requests: a specific submission channel, a person responsible for receiving requests, a standard response and a mechanism for monitoring the two-month deadline.
The response to the employee must include their individual pay level and the average pay levels by sex for the appropriate comparable category.
At the same time, annual notification of all employees regarding this right is required (Article 10 of Law 5316/2026; Article 56A of the Labour Law Code).
In small categories of employees, where average figures may reveal the remuneration of a specific person, the specific safeguards provided by law and the principles of data minimisation and confidentiality must be applied.
Data protection, however, cannot be used to nullify the right to information.
Review of Policies, Contracts and Exceptions
Individual contracts, workplace regulations and policies must be reviewed for clauses prohibiting disclosure of remuneration in the context of asserting equal pay rights.
At the same time, bonus, promotion and salary increase policies must be reviewed so that the criteria are clear, known and consistently applied.
Individual arrangements, bonuses without predetermined criteria, undocumented promotions and increases based exclusively on negotiating ability constitute major areas of risk.
Individual differences are not automatically prohibited; they must, however, be linked to a lawful and documented reason.
Preparation for Reporting
Employers with at least 100 employees must create a reporting calendar and carry out a trial calculation using data from the first reporting period.
For businesses with 250 or more employees, reporting begins by 7 June 2027 and is repeated annually.
For businesses with 150 to 249 employees, it also begins in 2027 and is repeated every three years, while for businesses with 100 to 149 employees it begins in 2031 and is likewise repeated every three years (Articles 11 and 30 of Law 5316/2026; Article 56B of the Labour Law Code).
The technical details of the digital procedure and additional templates are expected to be further specified through regulatory acts. Waiting for them, however, does not justify inaction.
The basic categories of data and the deadlines already arise from the law.
The 5% Threshold and Joint Pay Assessment
If a difference of at least 5% appears within a category of employees, there is no objective and gender-neutral justification and the difference is not remedied within six months, the business is required to proceed with a joint pay assessment together with employee representatives.
The procedure examines, among other things, the gender distribution, pay levels, differentiation criteria and corrective measures (Article 12 of Law 5316/2026; Article 56C of the Labour Law Code).
Management must not treat the 5% threshold as an acceptable difference. It is merely the threshold that triggers the specific procedure.
An individual case of unequal pay may be unlawful irrespective of the percentage involved.
Indicative Implementation Timeline
During the first three months of implementation, the mapping of employers, appointment of the project team, inventory of data and revision of recruitment procedures should be completed.
During the following three months, job families, pay levels and objective criteria should be developed.
Within six to twelve months, trial calculations, review of differences, corrective measures, management training and implementation of the employee request procedure are required.
This work must be repeated. New positions, acquisitions, reorganisations, changes to bonus schemes and mass recruitment may create new gaps.
An annual review of the pay architecture is safer than a fragmented response shortly before reporting.
Law 5316/2026 does not require businesses to eliminate every pay difference. It requires them to know why a difference exists, to demonstrate that it is based on the value of the work and to correct it where no lawful explanation exists.
A business that organises its jobs, data and procedures in good time will not only reduce litigation and regulatory risk. It will also acquire a more consistent, understandable and reliable remuneration system.
As regards employee claims, the burden of proof and groups of companies: these will be addressed in the third and final part of our series.
Managing Partner
Koumentakis and Associates Law Firm