EU introduces wage transparency directive to address gender pay gap in Sweden

The wage gap between men and women in Sweden stands at 10 percent, according to statistics. Even after accounting for differences in career choice, age, education, and agreed working hours, an unexplained wage gap of 4.8 percent remains.

One of the barriers to reducing this wage gap is said to be a lack of transparency. In response, the European Union has introduced a wage transparency directive to reinforce the principle of equal pay for equal work. The directive prohibits employers from asking for an applicant’s current salary during the recruitment process. Employers must also inform about the starting salary or salary scale of a position before wage negotiations. It will also become illegal to prohibit an employee from disclosing their salary.

The objective is to create an even and fair negotiating position by providing more information. A new feature of the law is that employees are entitled to wage information through their employer, regardless of whether they are a union member or not.

Today, all companies with more than 10 employees must conduct a wage survey in which the employer assesses whether wage differences between women and men are related to gender. With the new directive, companies with over 100 employees will need to report the survey to a supervisory authority, proposed to be the Discrimination Ombudsman.

Parts of the wage survey will then become public. The aim of these changes is to make it easier to detect unjust wages by ensuring employees know what those with similar tasks in the workplace earn on average. If wage discrimination is found, employees are entitled to compensation.

The directive has been criticized by the Confederation of Swedish Enterprise, which argues that it could pose a threat to the Swedish model. However, the objective is simply to move away from wages set on unjust grounds. Different wages will still exist, but they should not be based on factors such as gender or age.

According to the new rules, companies in the EU will need to provide information about wages and take measures if the wage gap between women and men exceeds 5 percent. Sweden has until June 1, 2026 to prepare the directive for Swedish legislation.