Lorena Tănase (ONV LAW) and Alina Sîrbu (Arthur Hunt) explain the EU Pay Transparency Directive and its implications for companies in Romania | Romania Insider
Lorena Tănase (ONV LAW) and Alina Sîrbu (Arthur Hunt) explain the EU Pay Transparency Directive and its implications for companies in Romania
As Romania moves closer to implementing the EU Pay Transparency Directive, local employers are preparing for one of the most consequential shifts in workplace regulation in over a decade. The directive, set for transposition by June 2026,…
Romania Insider
· Updated · 10 min read
As Romania moves closer to implementing the EU Pay Transparency Directive, local employers are preparing for one of the most consequential shifts in workplace regulation in over a decade. The directive, set for transposition by June 2026, introduces strict new rules on salary disclosure, pay reporting, and equal-pay verification, aiming to close persistent gender gaps and bring greater fairness to compensation practices across the EU. But beyond compliance, the new rules are poised to reshape how Romanian companies recruit, manage performance, promote staff, and communicate internally.
The upcoming changes will require employers to reveal salary ranges to candidates before interviews, abandon confidentiality clauses regarding pay, and justify any significant gender-based differences through objective, documented criteria. Companies with over 250 employees will also be the first to publish gender pay gap indicators in 2027, using 2026 data. If unexplained gaps of more than 5% persist, companies will have to conduct a joint pay assessment with employee representatives, an obligation that could expose deeper structural issues and force accelerated corrective action.
To understand how these requirements will affect both the legal and HR landscapes, Romania Insider spoke with Lorena Tănase, Partner at ONV LAW (left), and Alina Sîrbu, Partner at Arthur Hunt (right).
Lorena Tănase explains that the directive will compel companies to revisit employment contracts, remuneration frameworks, and internal policies, warning that non-compliant employers may face fines, legal claims, or exclusion from procurement procedures.
Alina Sîrbu highlights the cultural shift ahead, noting that transparency will bring consistency to hiring and promotion decisions, reduce discretionary practices, and push companies, especially those lacking job architectures or reliable data, to invest in more mature HR systems.
While many employers see the directive as a compliance hurdle, both experts agree that early adopters can transform transparency into a competitive advantage: strengthening trust, improving employer branding, and aligning Romanian workplaces with broader European expectations.
Read the full Q&A interview below:
Could you briefly explain the main objectives of the EU Pay Transparency Directive and when companies in Romania can expect it to take effect?
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The EU Directive 2023/970 aims to strengthen the principle of “equal pay for equal work or work of equal value” by increasing pay transparency and introducing effective enforcement mechanisms. Its goal is to eliminate gender-based pay gaps and ensure that companies clearly communicate salary criteria, provide employees and candidates with relevant information, and correct unjustified pay differences. Member States must transpose the Directive by 7 June 2026, and the first reports for large companies will be required in 2027, covering 2026 data.
What are the key legal changes the directive introduces for employers, particularly regarding pay reporting and transparency requirements?
Lorena Tănase: The Directive introduces several new obligations for employers to promote transparency and prevent pay discrimination. Companies will need to adjust their policies and processes to comply with these rules. Key changes include:
employers must inform candidates of starting salaries or pay ranges before interviews
employers are prohibited from asking candidates about their previous salaries
employees have the right to access their own remuneration and the average/median pay by gender for comparable work or work of equal value
companies must report gender pay gaps and carry out internal pay assessments if differences exceed legal thresholds
remuneration criteria must be objective, gender-neutral, and documented
internal pay policies, employment contracts, and recruitment processes must be adapted to ensure transparency and equality.
What type of pay information will companies be required to share with employees, job candidates, or authorities, and how often?
Lorena Tănase: Companies are required to be transparent about salaries and provide relevant information to candidates, employees, and authorities.
Candidates must be informed of the starting salary or the pay range for a position before interviews, ensuring transparency from the outset of the recruitment process.
Employers shall make easily accessible to their workers the criteria that are used to determine workers’ pay, pay levels and pay progression. Those criteria shall be objective and gender neutral. Workers shall have the right to information on their individual pay level and the average pay levels, broken down by sex, for categories of workers performing the same work as them or work of equal value to theirs. Also, companies are prohibited from requesting candidates’ salary history, and confidentiality clauses regarding employees’ pay will no longer be permitted.
In turn, companies will be required to report gender pay gap indicators, such as differences in average salaries, and the distribution of employees across pay bands.
How will the directive affect confidentiality clauses, employment contracts, and overall pay policies within companies?
Lorena Tănase: The Directive brings important changes that require companies to review and adapt their internal rules and employment agreements to ensure pay transparency. General confidentiality clauses regarding salaries, that prevent employees from discussing their salaries will need to be removed. Employment contracts and internal policies should clearly document pay structures and ensure that any differences are objectively and gender-neutrally justified.
Pay policies must be gender-neutral and capable of explaining differences for equivalent work. Recruitment processes also need to be adapted, clearly stating pay ranges from the initial recruitment phases and ensuring that interviews avoid questions about candidates’ previous salaries.
What penalties or reputational risks could companies face if they fail to comply with the new rules?
Lorena Tănase: Failing to comply with the Directive can have both legal and reputational consequences, making it essential for companies to prepare in advance. Legally, employers may face fines, exclusion from public procurement procedures, corrective measures, and potential lawsuits in which employees seek damages if pay differences are not objectively justified. The burden of proof is on the employer to show that no gender-based discrimination has occurred. Moreover, it may become necessary for companies to obtain a “pay transparency compliant” label to remain eligible within contracting chains, as contractual partners—particularly larger organizations—may require collaboration only with entities that meet such standards, similar to ESG-related requirements.
From a reputational perspective, disclosed pay gaps can harm an employer’s brand, affect staff retention, and strain relationships with employee representatives or unions. Unprepared companies may also incur additional costs for internal audits, system changes, salaries adjustments and potential litigation once the law comes into effect.
How will the requirement to disclose pay ranges or criteria affect recruitment, salary negotiations, and promotion processes?
Alina Sîrbu, Partner Arthur Hunt: As Romania prepares to implement the EU Pay Transparency Directive by June 2026, companies are entering a new era of openness about pay. What began as a compliance obligation may quickly become a differentiator, separating organizations that use transparency as a tool for trust, fairness, and brand strength from those who struggle to adapt and face reputational, legal, and cultural risks.
One of the most visible shifts will be in the hiring process. Employers will have to disclose pay levels or ranges before interviews, and they will no longer be allowed to ask candidates about salary history. Job ads must use gender-neutral language and reflect objective, transparent pay criteria.
This means fewer ad-hoc negotiations and more structured offers within predefined bands. Recruiters and managers will need clear talking points and consistent internal approvals. Promotions will also need to follow documented, transparent rules. Subjective or discretionary decisions will no longer pass unnoticed.
For well-prepared employers, this is an opportunity to professionalize pay frameworks, improve internal equity, and position themselves as trustworthy, modern organizations. But for those without a clear job architecture or data accuracy, compliance could prove costly and stressful.
What should companies know about the new gender pay gap reporting and pay audit obligations, and how should they prepare?
Alina Sîrbu: Companies with over 250 employees will be the first to report gender pay gaps by June 2027, followed by smaller employers in later years. If an unexplained pay gap of more than 5% persists, they will be required to carry out a joint pay assessment with employee representatives or take corrective measures within six months.
Beyond numbers, this process demands maturity in job evaluation, pay structures, and data collection. Employees will gain the right to request information about their pay level and the average pay for equal or equal-value work, while pay-secrecy clauses will be prohibited.
This new level of visibility can reveal long-hidden imbalances, creating pressure, but also the possibility to correct them and showcase progress. Transparent reporting can thus become a strategic reputation tool rather than just a compliance burden.
How can foreign or multinational employers align their global pay structures with Romania’s local transparency requirements?
Alina Sîrbu: For most multinational employers, Romania’s pay transparency rules will be relatively easy to implement. Many already have structured salary bands, job grading systems, and objective pay criteria built into their global remuneration policies. These provide a solid foundation for compliance.
Since the directive applies across the entire European Union, large international groups will roll out similar transparency measures in all their European entities, creating consistency and shared governance.
Still, success will depend on local adaptation, ensuring that pay ranges, communication materials, and reporting processes meet Romanian legal and cultural specifics. In this sense, pay transparency is less a disruption for global companies and more an opportunity to showcase fairness, strengthen employer branding, and reinforce European alignment.
What role should HR play in communicating these changes internally and fostering a culture of transparency?
Alina Sîrbu: Pay transparency will reshape not just pay systems, but also culture, communication, and company reputation. HR will lead this change, but it cannot and should not do it alone.
Management needs to grasp the full impact, allocate proper resources, and stay actively involved to ensure credibility and alignment. Without leadership backing, transparency risks becoming a technical exercise instead of a genuine shift toward fairness and trust.
In organizations that already value openness and dialogue, the transition will be smoother. Where trust is low, the directive will expose deeper cultural challenges.
Ultimately, pay transparency is not just an HR reform, it’s a leadership test and a mirror of how authentic a company’s culture truly is. So, HR should be at the centre of this quest, but leadership must stand beside it.
Beyond compliance, how can companies leverage pay transparency to drive trust, engagement, and stronger employer branding?
Alina Sîrbu: While many organizations view the directive as an administrative burden, progressive employers see it as an opportunity for differentiation. Those who communicate a clear pay philosophy, show how decisions are made, and actively close pay gaps will stand out in a crowded talent market.
Transparency builds trust, engagement, and retention, especially among younger generations. It can also elevate employer branding by signalling integrity, inclusion, and professionalism. In a market where top talent increasingly values fairness and purpose, transparency can become a true strategic advantage.
In your view, what long-term impact will this directive have on Romania’s labor market and on how foreign companies operate here?
Alina Sîrbu: Over time, pay transparency is likely to narrow gender gaps, standardize compensation practices, and reduce salary disparities driven by negotiation skills rather than performance. The Romanian labour market may become more mobile and merit-based, rewarding companies that invest in robust HR systems and equitable pay design.
However, the transition won’t be smooth for everyone. Companies unprepared for transparency, lacking data quality, job structures, or communication capability, may face legal exposure, internal tension, and higher compliance costs.
In contrast, those who act early will not only meet the letter of the law but also gain the trust of their people and the respect of the market. Pay transparency, far from being a bureaucratic exercise, could well become the new hallmark of credible, competitive employers in Romania.
Lorena Tănase: In the long term, the Directive is likely to bring profound internal changes in Romanian companies, fundamentally altering how remuneration is structured, evaluated, and discussed. It will drive the transformationof HR processes and encourage companies to adopt clearer, more objective pay frameworks. Transparency will gradually reduce the traditional reluctance to discuss salaries and hence will create a workplace culture that supports fairness and helps close persistent gender pay gaps
The Directive will create both challenges and opportunities. On one hand, multinationals with mature compliance systems will adapt more easily, aligning practices with global standards of pay equity and reporting. On the other hand, the administrative burden will increase, especially for employers managing cross-border teams or complex bonus structures. In the long run, however, companies that embrace transparency are likely to gain reputational advantages, attract and retain talent more effectively, and contribute to a more equitable and predictable labor market environment in Romania and all over the EU as well.
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*This interview was edited by Romania Insider for ONV Law.
