With the upcoming EU Pay Transparency Directive, which must be transposed into national law by June 7, 2026, greater openness around pay will become mandatory. This is already raising many questions and uncertainties among both employees and employers. Will everyone soon be able to look up each other’s salaries? And will companies still be able to fairly reward strong performance? These are three of the most common misconceptions about the directive.
A new directive for a sensitive topic
The EU Pay Transparency Directive is the European directive on pay and compensation transparency. Its goal is to reduce the gender pay gap by requiring employers to communicate more transparently about salaries and take action when pay differences cannot be explained. In Belgium, the harmonized gender pay gap stood at 0.7% in 2023, according to Statbel. When looking at hours actually worked rather than contractual hours, that figure rises to 4.7%.
All EU Member States must transpose the directive into national law by June 7, 2026. Many Belgian employers are already preparing for the new rules. Nearly three quarters (73%) say they are aware of the new requirements, while 58% believe their organization has everything in place to comply. Among employees, the picture looks different: only 30% know what the directive entails and what rights come with it. This gap shows that pay transparency is currently mainly discussed at the policy level, but is less present in day-to-day workplace practice.
At the same time, talking about pay remains sensitive for many Belgians. In fact, 63% of employees still consider conversations about compensation to be taboo, both privately and professionally. That reluctance also fuels several misconceptions about the directive. Here are three of the most persistent ones today.
1) “Soon, everyone will be able to look up each other’s salary”
The directive does not require companies to make individual salaries public. In other words, colleagues will not simply be able to look up exactly how much someone earns. What the new rules will do is give employees and job applicants more insight into how pay is determined within an organization. For example, applicants will be allowed to request information about the starting salary or pay range for a role before salary negotiations begin. Employees will also have the right to request information about the average pay within their pay category, including any differences between men and women.
In Belgium, a form of pay transparency has already existed at sector level for some time. Many pay agreements are laid down in collective labor agreements between trade unions and employers’ organizations. These collective agreements are publicly available and already serve as an important reference point for many companies today.
However, the directive will require organizations to take a more critical look at their pay structure. Which roles belong to which pay scales? What role do experience, skills, and responsibilities play? This requires clear choices and strong communication from managers. After all, pay is not just about numbers. Compensation is also linked to status, recognition, and fairness within teams. Especially when differences become visible between colleagues in similar roles, tensions or questions can arise more quickly.
2) "Companies will no longer be allowed to reward strong performance"
Greater pay transparency does not mean that all employees have to earn the same amount. Organizations can still make differences in pay, as long as they can explain them in a clear and objective way. That is also where the biggest challenge lies. Many companies today have historically grown pay differences that are difficult to justify. The directive therefore encourages organizations to clearly define which factors play a role in raises or career progression. Is it mainly experience and seniority? Skills? Or performance?
Clear rules benefit not only employers, but also employees. When employees know how an organization evaluates pay or career progression, they better understand what is expected of them and which steps can lead to additional responsibilities or higher pay. This also matters during salary negotiations. Employees who connect their contribution to the results of their team or organization often have a stronger position than those who argue only from an individual perspective. After all, an employment relationship remains an interaction between employee, manager, and organization.
3) “Greater pay transparency will mainly demotivate employees”
Pay undoubtedly affects motivation and job satisfaction. But pay is rarely the only factor that determines how people feel at work. Employees often draw just as much, or even more, motivation from recognition, interesting tasks, autonomy, development opportunities, and the feeling that they are making progress.
Pay transparency requires trust
The arrival of the EU Pay Transparency Directive is ultimately not just about reporting or legal obligations. It also forces organizations to think more consciously about how they explain compensation, which choices they make, and how fair and consistent those choices feel to employees. That requires more than simply sharing numbers.
In our culture, pay is still often linked to status, success, and recognition, which makes conversations about compensation sensitive. That is precisely why the directive also offers an opportunity to gradually break the taboo around pay and place greater emphasis on clear expectations, objective criteria, and open communication. Organizations that start working on this today will not only be better prepared for the new regulations, but will also build stronger trust, engagement, and sustainable employment relationships.
