Your salary history is none of their business. Romania has until June 7, 2026 to ban a decades-old recruitment practice

The wage transparency obligation will require employers to review recruitment notices, salary scales, bidding procedures and internal recruitment policies, the deadline for transposition of EU Directive 2023/970 on wage transparency being June 7, 2026.

The obligations introduced by this Directive must be carefully analyzed, because the legal effects differ depending on the structure of each employment relationship, the internal remuneration system and the concrete way in which the employer establishes, justifies and communicates the salaries, says Dr. Radu Pavel, the Coordinating Lawyer of the Romanian Law Society Pavel, Mărgărit și Asociatii,

The complexity of these situations is not limited to the simple publication of salary ranges during the recruitment stage, but includes the verification of the criteria used to establish remuneration, the analysis of remuneration differences between women and men, the evaluation of internal policies regarding salary evolution and the identification of risks of direct or indirect discrimination in employment relationships.

Directive (EU) no. 970/2023 on salary transparency introduces a new, more detailed and more intrusive legal framework for verifying compliance with the principle of equal remuneration for the same work or for work of the same value between women and men.

In the legislation in force there are already rules regarding equal treatment, the prohibition of discrimination and the guarantee of equal remuneration, but the Directive imposes procedural mechanisms and compliance obligations that go beyond the current internal framework and which will require legislative and organizational adaptations until June 7, 2026.

What salary information must be disclosed prior to recruitment

Directive (EU) 2023/970 on salary transparency enshrines a paradigm shift: remuneration is no longer treated exclusively as an internal element of contractual negotiation, but as an element that must be made known to the candidate before employment, in a manner that allows for real and informed negotiation. The rule follows from Article 5, which obliges the employer to provide information on the initial level of remuneration or the related range, established on the basis of objective and gender-neutral criteria, as well as, where applicable, the relevant clauses of the applicable collective agreement.

At the same time, the employer is prohibited from requesting the candidate's salary history, and job advertisements and job titles must be worded neutrally, without practices that perpetuate gender differences or indirect mechanisms of discrimination. This solution aims to limit the transfer of already existing wage imbalances to the new employment relationship and to reduce the risk of gender discrimination being reproduced from one employment to another.

However, the current internal regime preserves, through Article 163 para. (1) of the Labor Code, the salary confidentiality rule, which places it in opposition to that of the Directive, which requires member states to prohibit clauses preventing the disclosure of remuneration in order to defend the right to equal remuneration.

Pay gap reporting and employees' right to pay information

Directive (EU) 2023/970 on pay transparency does not stop at the recruitment stage, but establishes a substantial right of workers to request and receive information in writing regarding their own level of remuneration and average levels of remuneration, broken down by gender, for categories of workers performing the same work or work of the same value. This right results from Article 7 of the Directive and is doubled by the employer's obligation to inform employees annually about the existence and the way to exercise this right.

The EU directive imposes a legal regime of mandatory internal audit

One of the most important novelties of Directive 2023/970 on salary transparency is the transition from simply noting the differences to obliging the employer to actively intervene to remedy them. Article 9 paragraph (10) states that, when pay differences between women and men are not justified on the basis of objective, gender-neutral criteria, the employer must remedy the situation within a reasonable time, in close cooperation with the workers' representatives, the labor inspectorate and, where appropriate, the equality body.

Article 10 of the Directive goes further and requires the joint assessment of remuneration when three conditions are met cumulatively: the reporting shows a difference of at least 5% in a category of workers, the difference is not objectively justified and the employer has not remedied it within six months of the reporting. This joint assessment is not a mere formality, but a process that must identify the causes of the difference, analyze the proportion of women – men in the relevant categories, average levels of remuneration, possible reasons for the differences and measures to eliminate inequalities. From this perspective, this EU directive imposes a legal regime of mandatory internal audit, which can transform a statistical problem into an obligation to reorganize the job classification and evaluation system.

For employers, the 5% threshold should not be seen as an automatic fault threshold, but as a threshold triggering additional obligations of justification and, in the absence of objective justification, of correction. In practice, the basic legal issue will be the employer's ability to demonstrate that the differences are based on real, verifiable and neutral criteria such as skills, responsibility, performance or working conditions, without them masking discrimination or an indirect form of gender discrimination. In the absence of a coherent internal methodology, the risk is that the differences will be considered unjustified and generate not only remedial obligations, but also exposure to labor disputes.

Sanctions, compensation and enforcement mechanisms

Article 16 enshrines the right to full compensation and reparation for any worker who has suffered damage as a result of a breach of a right or obligation related to the principle of equal pay. The compensation must be real and effective and include full recovery of overdue payments and related benefits in kind, compensation for lost opportunities, moral damages and late interest.

According to Article 17 of the Directive, the courts or competent authorities are allowed to order the cessation of the violation and the adoption of the necessary measures to respect the rights, and Article 18 provides for the transfer of the burden of proof and establishes that non-compliance with salary transparency obligations may result in the transfer of the burden of proving the non-existence of discrimination to the employer.

It also provides for the obligation for member states to provide for effective, proportionate and dissuasive sanctions, including fines, taking into account aggravating factors, repeated violations and the seriousness of the facts, according to art. 23 of the act. Consequently, non-compliance is no longer just an internal reputational issue, but a full legal risk with financial, evidentiary and litigation exposure.

In relation to Romanian law, this regulation is compatible with the already existing mechanisms, but will lead to a more intense and rigorous application of them. Labor Code, by article 6 para. (4) and (5), protects employees who make complaints or initiate procedures to defend their rights and recognizes their possibility to request compensation and restoration of the previous situation. Also, Ordinance no. 137/2000 allows the notification of the CNCD and the formulation of requests in court for the reparation of the damage and the removal of the consequences of an act of discrimination.

However, after the transposition of the Directive, the number of disputes may increase, as employees will have stronger evidentiary tools at their disposal, and employers will also be exposed to conflicts in which salary claims are combined with contesting some measures considered repressive. In practice, a conflict born from the lack of salary transparency can evolve into broader labor disputes, in which workplace discrimination, dismissals without reason, disciplinary dismissals, as well as the nullity or groundlessness of a dismissal decision are invoked. In such cases, the relationship between remuneration, possible adverse treatment and personnel measures adopted by the employer becomes of central importance.

“EU Directive 2023/970 imposes stricter rules on salary transparency and equal pay, and failure to comply with them can lead to labor disputes, sanctions and claims based on workplace discrimination and gender discrimination.”, said Dr. Radu Pavel, the Coordinating Lawyer of the Romanian Law Society Pavel, Mărgărit and Associații.