Romania is taking concrete steps toward aligning with the new European Union requirements regarding salary transparency. The European directive on pay transparency has been partially transposed into national legislation, which means new obligations for employers, changes for employees, and a redefinition of how salaries are negotiated and communicated.

These legislative measures aim to reduce pay gaps between women and men, combat wage discrimination, and create a fairer, more transparent, and accountable work environment. In this article, we explain what the new legislation entails, what obligations fall on employers, and what rights employees gain.

What the European directive on pay transparency provides

The European Union adopted in 2023 the Pay Transparency Directive, which specifically aims to reduce the pay gap between women and men. According to data from the European Commission, in the EU, women earn on average 13% less than men for equal work or work of equal value.

To address wage disparities between women and men, the EU Pay Transparency Directive imposes a series of legal obligations on Romanian employers. These include prohibiting confidentiality clauses regarding salaries, providing clear criteria for setting pay and promotion, and reporting pay differences between employees of different genders.

Moreover, employees will have the right to request information about average salaries for comparable positions, and employers will be required to correct unjustified wage gaps that exceed the 5% threshold. The goal of these measures is to promote a fair work environment based on transparency and equal treatment.

Transposition into Romanian legislation

According to information provided by the Ministry of Labor, Romania has begun the process of transposing the directive. The bill adopted in 2024 explicitly eliminates salary confidentiality clauses from individual employment contracts. Employees in the private sector will be able to freely discuss their salaries with colleagues or third parties without risking disciplinary sanctions.

This change represents a radical paradigm shift for the Romanian labor market, where income confidentiality was previously a common and often contractually imposed practice.

At the same time, the bill provides that employers with more than 100 employees will be required to periodically publish reports on wage differences between women and men. Reporting will be anonymous, at the level of comparable job groups, and must also reflect additional benefits (bonuses, performance awards, in-kind benefits, etc.).

What are the obligations for employers

For employers, the new pay transparency regulations require the development of a clear and documented system for setting and evaluating wages. They will be required to define and communicate objective criteria for salary levels, ensure transparency in promotion processes, and allow employees access to information about average wages for similar positions.

In addition, companies with more than 100 employees will be required to periodically compile reports on wage disparities and, where unjustified imbalances are found, to correct them within a legal timeframe. Human resources departments and management teams will also need training to correctly apply the principles of pay equity.

Violations of these obligations may be sanctioned by the Labor Inspectorate, and employees may seek compensation in court if they prove wage discrimination.

New rights for employees

Employees in Romania will have access to a number of new rights aimed at strengthening pay transparency and equity. Among these is the ability to request, in writing, information about the average salary for comparable positions within the company, as well as the right to openly discuss salary with colleagues without the risk of employer sanctions.

Additionally, employees will be able to challenge any unjustified wage differences in court and will have the right to receive a written and reasoned response from the employer regarding salary or discrimination-related requests. If an unjustified wage difference is found, employers will be required to take corrective measures to remedy the situation.

What’s next

Full implementation of the directive will become mandatory in Romania by 2026 at the latest. Until then, companies have time to review their pay policies, develop transparent evaluation grids, and adopt an open organizational culture based on fairness and equity.

It is recommended that each company conduct an internal analysis of pay disparities, identify any imbalances, and correct them in advance. Involvement from legal and human resources departments is also essential to ensure compliance with the new legal requirements.

Cabot Transfer Pricing: we support tax compliance and pay equity

At Cabot Transfer Pricing, we believe in proactive compliance and in building fair tax and organizational systems. The legislative changes regarding pay transparency bring both challenges and opportunities for companies. This is a timely opportunity to analyze, clarify, and document pay policies from both legal and tax perspectives.

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