The EU Pay Transparency Directive introduces new obligations for employers and requires companies to prepare before its entry into force in 2027.1
WHY THIS MATTERS
Finland is moving towards the national implementation of the EU Pay Transparency Directive. The Government proposal published in July 2026, on legislative changes to increase pay transparency introduces significant new obligations for Finnish employers. The legislative amendments are intended to take effect on 1 January 2027. The aim of the regulation is to reduce the gender pay gap and strengthen employees’ right to equal pay.
The implementation of pay transparency legislation will be conducted largely through amendments to the Equality Act. For employers, the proposed changes would create new legal and administrative obligations and may provide an opportunity to communicate remuneration principles more clearly. Employers may wish to review their remuneration structures, processes, and systems in preparation for the proposed requirements.
Key Highlights
According to the Government proposal, the key obligations relate in particular to recruitment, transparency of pay information and monitoring of pay differences. On the basis of the Government proposal and the EU regulation, the main employer obligations can be summarised as follows:
Pay information provided before recruitment
During the recruitment phase, job applicants are required to be informed of the salary or salary range for the position in question. At the same time, employers would be prohibited from asking for information about the applicant’s previous salary history.
Pay transparency for employees
Transparency of pay levels for current employees, including the right to obtain information on their own pay and their pay level in relation to the pay of employees performing equivalent or work of equal value.
Pay reporting
Employers with at least 100 employees would be subject to reporting requirements concerning pay levels and pay differences. If unjustified pay differences are identified in the reporting, the employer is required to assess the reasons for the situation and, when necessary, develop corrective measures.
Transparent remuneration criteria
Employers would be required to clearly describe the criteria used to determine pay and career progression and to assess whether their remuneration systems support the principle of equal pay.
Strengthening equal pay
- The proposal would strengthen the principle of equal pay for the same work or work of equal value with more effective sanctions and legal remedies.
- In compensation claims concerning pay discrimination, the limitation period for bringing an action is set at three years.
- If the employer has neglected a pay transparency-related obligation, the burden of proof would shift to the employer. In addition, obligations may be reinforced by a separate non-compliance fee.
KPMG INSIGHTS
In light of the changes, employers might wish to consider the following:
- Mapping the current state and analysing existing pay and reward systems, pay levels, and pay differences.
- Clarifying pay structures and remuneration principles.
- Preparing policies related to pay transparency.
- Reviewing recruitment processes and related training.
- Building capabilities for pay-data reporting and data management.
- Providing training and communication for personnel, including human resources personnel, managers, and employees.
- Conducting risk management and legal assessments.
The earlier companies begin preparing for the proposed changes, the more controlled the implementation could become. Early preparation may help identify potential risks and address structural challenges before the proposed obligations enter into force. It may also provide an opportunity for employers to strengthen their position in the labour market through greater pay transparency.
If assignees and/or their programme managers have any questions or concerns about the scope of the update, its application and potential impacts, and appropriate next steps, they should consult with their qualified professional or a member of the GMS team with KPMG in Finland (see the Contacts section).
ENDNOTE:
1 Finnish Parliament (Eduskunta) (in Finnish), “Government Bill HE 129/2026 vp,” published on 9 July 2026.
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The information contained in this newsletter was submitted by the KPMG International member firm in Finland.
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