Pay transparency refers to policies and practices that increase access to information about how compensation is determined, including salary or wage ranges, pay-setting criteria, pay progression, and differences in compensation among workers performing the same or comparable work. Pay transparency measures are intended to make compensation practices more understandable and consistent, and to support the identification and correction of unjustified pay disparities.

Pay transparency may include requirements for employers to:

• disclose salary ranges in job postings or before interviews
• provide employees with information about compensation levels and pay-setting criteria
• prohibit inquiries about applicants’ prior salaries
• report organizational pay gaps
• use objective criteria to evaluate work and establish compensation.

Approaches to pay transparency vary considerably across countries and regions. Some jurisdictions have adopted national or supranational requirements, while others rely on a combination of national, state, provincial, or local laws and voluntary employer practices. These differences reflect broader variations in labor regulation, collective bargaining, employment law, and the roles of governments and social partners in establishing workplace standards.

As example, the European Union Pay Transparency Directive (Directive (EU) 2023/970) is a major international policy development in this area. Adopted in 2023, the directive is intended to strengthen application of the principle of equal pay for equal work or work of equal value between women and men through pay transparency and enforcement mechanisms. European Union member states were required to transpose the directive into national law by June 7, 2026. Among its provisions, the directive establishes requirements related to pay information for job applicants, workers’ access to information about pay and pay-setting criteria, employer reporting on gender pay gaps, and gender-neutral job evaluation and classification. In determining whether workers are performing work of equal value, employers are to use objective, gender-neutral criteria that include skills, effort, responsibility, and working conditions.

The EU approach illustrates how a common regional policy framework can establish broadly shared requirements while allowing member states to incorporate those requirements into their own national legal systems. In the United States, by contrast, pay-transparency requirements have developed primarily through state and local legislation, resulting in a more decentralized policy environment.