The issue of gender equality in the workplace is an ongoing debate that has been at the heart of discussions surrounding policy-making, and for good reason. An essential but less visible part of this debate is the issue of pay secrecy. Pay secrecy helps to reinforce the pay gap, because employers are not required to disclose salary information, which prohibits female and male workers from knowing if they are being paid equally for the same work. This is also a general nuisance for workers, regardless of gender, who are searching for work. Job applicants are often at a disadvantage during their job search, as employers withhold details until the last moment that ultimately determine whether applicants will take the jobs or not, e.g. salary information. Instead, employers may offer a broad salary range, or simply ask applicants what they expect to be paid. This causes asymmetric information as applicants may pursue potential jobs even if the wage level is not acceptable simply because they do not have access to accurate salary information during the application process.

A lack of pay transparency can be detrimental to workers, as they may pursue jobs that are not “financially viable”[1], wasting time and resources that might otherwise be spent on better job options.[2] It may also be detrimental in that it exacerbates the gender pay gap. The gender pay gap is attributed to several factors, including pay discrimination, women commonly working in sectors and positions that pay less, and women being responsible for more ‘unpaid domestic and care responsibilities’ — which influences how much time they have for their career and which sector they enter.[3]Therefore, the issue of pay transparency is intrinsically also an issue of gender equality.

​​Employers are often hesitant to disclose salary information for a number of reasons, e.g. due to worries that it may cause conflicts in the workplace.[4] They also worry that competitive disadvantages may occur when their competitors use their wage information to win over attractive candidates by offering higher salaries.[5] Pay secrecy also gives companies more negotiation power.  For all of these reasons, a lack of transparency about wages is perceived to be in the employer’s best interest.[6]

Despite reluctance from employers, there is a competitive advantage that can be gained from the implementation of pay transparency. Research suggests that employers who disclose wage information upfront receive applications from a more attractive and diverse range of candidates.[7] Workers are more inclined to trust employers and view them as fair when transparency is a clear priority, because this communicates that employers are both committed to ensuring equal pay and creating information symmetry, which gives job applicants more negotiation power and standing.[8]

Legislation has been introduced to tackle the issue of pay secrecy. In March 2014, the European Union put forward the Pay Transparency Act, which aims to improve equal pay between men and women.[9] It promotes wage transparency by encouraging Member States to adopt measures such as requiring employers to report on pay level according to gender, encouraging employers to conduct pay audits that analyse the number of men and women in certain positions or employee categories, and adopting measures that ensure collective bargaining.[10] This Act was merely a recommendation, however, which created an expectation for compliance by Member States but was not legally binding.

More recent legislation has demonstrated that harsher stances towards pay secrecy are increasing. For instance, in 2019 Latvia added a section to their national Labour Law code, stipulating that the publication of salary information is mandatory for job advertisements.[11] [12] Furthermore, the EU proposed a Pay Transparency Directive which would reinforce many of the goals of the 2014 Pay Transparency Act, but with stricter enforcement mechanisms. If adopted, this would require Member States to adopt enforcement measures to compel employers to implement pay transparency.[13]Workers would also gain access to redress and compensation in cases of “back pay […], lost opportunity, [and] ‘moral prejudice’”.[14] This Directive is currently pending and undergoing a feedback period, after which it has the potential to be adopted by the European Commission, in which case it would be implemented in 2024.[15] [16] This Directive illustrates potential improvements in labour standards as well as upcoming challenges for employers as legislation becomes increasingly binding.

Overall, the implementation of pay transparency is beneficial on a number of levels, for both employers and potential employees. Although it may be some time before the EU Pay Transparency Directive might be adopted, the recent trend of states introducing their own national legislation on this issue is promising. Despite the continued vitality of gender equality in the workplace, these developments are a step in the right direction.

[1]  Mark Johanson, ‘Why companies don’t post salaries in job adverts’ (2021) BBC.

[2] Ibid.

[3] European Commission Fact Sheet, ‘Pay Transparency: Time to See the Gap!’ (2019) Available at

[4] Mark Johanson, ‘Why companies don’t post salaries in job adverts’ (2021) BBC.

[5] Ibid.

[6] Ibid.

[7] Ibid.

[8] Ibid.

[9] Commission Recommendation of 7 March 2014 on strengthening the principle of equal pay between men and women through transparency, EUR-Lex, available at

[10] Ibid.

[11] Mark Johanson, ‘Why companies don’t post salaries in job adverts’ (2021) BBC.

[12] Latvian Labour Law Ch. 10 Section 32, 3.2 “(3) A job advertisement shall include: 2) the total gross monthly or yearly sums of the wage of the respective profession or the envisaged amplitude of the hourly salary rate.” Available at

[13] Monica Kurnatowska, Bernard Trappehl, James Brown, ‘European Union: Commission proposes pay transparency rules to secure equal pay’ (2021) Baker McKenzie.

[14] Ibid.

[15] European Commission, ‘Gender pay gap – transparency on pay for men and women: About this initiative’, available at

[16] Monica Kurnatowska, Bernard Trappehl, James Brown, ‘European Union: Commission proposes pay transparency rules to secure equal pay’ (2021) Baker McKenzie.