Pay equity laws requiring employers to analyze, disclose, and correct pay gaps continue to be a hot-button issue worldwide. In this article, Kim Hendon, Affirmity Vice President of Sales, explores the sometimes lacking common framework for pay equity and transparency compliance worldwide, and the challenges facing organizations with premises and employees in different states and nations.
A future where pay equity compliance is the norm wherever you operate, rather than a regional consideration, has been on the horizon for years. And while governments across Europe, North America, and beyond have spent much of the last half-decade expanding and overhauling their pay transparency and equity laws, the increasingly global reach of pay compliance remains nonetheless exceptionally regionally nuanced.
In short, the challenge is not just knowing the rules, it’s knowing which rules apply where, on what timeline, and executing subtly different programs in the face of intensifying legal action.
Here’s what the global pay equity landscape looks like right now—and why standing still is no longer a defensible position.
Europe: One Directive, 27 Different Implementations
To those of us outside of the European Union, the passing of 2023’s EU Pay Transparency Directive seemed like a watershed moment for pay legislation that would bring some much-needed clarity for global businesses. Here was a modern implementation of pay law, complete with a pay equity component, applying to 27 countries, and likely to be copied by its neighbours and trading partners.
The reality is slightly less straightforward. Pay equity and transparency in the EU are more a matter of 27 countries using broadly similar laws, with subtle differences that organizations still have to contend with.
This is partly just expectation not quite matching up with how things work in Europe—the European Commission issues directives and the member states draft and adopt national legislation that meets the requirements set out in the directive. Knowing what the EU Pay Transparency Directive requires only gets you so far. The process of transposition into different lawbooks leaves room for individual countries to add their own requirements, or to interpret certain aspects of the directive differently to other governments.
On the other hand, a lesser-anticipated aspect of “how things work in Europe” is the possibility that they don’t, at least not immediately. The EU set a transposition deadline of 7 June 2026, but this has now passed with a large number of member states yet to even produce draft legislation
As of the time of writing, only Greece, Italy, Lithuania, Malta, and Slovakia have successfully transposed the law. Additionally, Belgium and Poland have achieved a partial implementation (Belgium has transposed for the public sector in a single state, Poland has implemented the directive’s recruitment transparency components but is still revising drafts related to the remainder).
This isn’t unusual for EU directives—one look at the European Commission’s press corner reveals an entire “infringement decisions” category detailing the various instances of member states lagging behind on implementing various directives. The commission has a formal procedure by which it eventually brings member states into line, but this can take many months to achieve the desired results.
In the meantime, global businesses remain uncertain when the remaining laws will be drafted and then implemented, and must contend with a patchwork of approaches for the foreseeable future. Even once the directive has finally been adopted everywhere, organizations will still find they must check whether there are any local nuances to consider. Add to this the requirements of non-EU members—Iceland, Norway, Serbia, Switzerland, and the U.K. all already require reporting—and the picture will remain a complex one regardless.
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North America: A Different Kind of Complexity
Meanwhile, back in the United States, a patchwork approach is emerging precisely because there is no unifying directive.
On the pay equity front, California and Illinois have reporting requirements. California requires covered employers to submit annual pay data reports, while Illinois requires certain employers to obtain and renew an Equal Pay Registration Certificate and provide pay and demographic information to the Illinois Department of Labor. Massachusetts, meanwhile, offers strong safe harbor provisions for organizations that complete self-evaluations in good faith.
However, the U.S. now lacks any kind of federal-level pay equity measure: federal contractors were formerly subject to one—Executive Order 11246 had a pay analysis requirement—but it was rescinded in January 2025.
With the current administration unlikely to prioritize pay equity measures any time soon, it’s up to states to create and strengthen existing pay laws, once again causing something of a headache for organizations operating in multiple states.
This is very much the picture for pay transparency at this moment: recent months have seen Virginia and Maine pass laws requiring pay range disclosure and similar measures, and around two-fifths of all states have some kind of pay transparency measures in place.
Canada is similarly ununified in its approach, because while its provinces are subject to a Pay Equity Act, its territories (Yukon, Northwest Territories, Nunavut) are currently exempt. Furthermore, Ontario and Quebec have their own implementations.
Pay Equity Trends in the Rest of the World
In Latin America, Brazil, Peru, and Venezuela all have pay equity reporting requirements, with Brazil and Peru additionally requiring organizations to produce pay equity plans. Elsewhere, Australia, Japan, Israel, and South Africa also require organizations to report to government agencies.
Each of these nations, just like those in Europe, and the states and provinces of the U.S. and Canada, has its own definition of what counts as “equal” work, its own comparison methodology, and its own reporting body. There’s no single standard for a global employer to apply everywhere.
DOWNLOAD OUR GLOBAL PAY EQUITY INFOGRAPHIC | ‘Pay Equity Reporting Around the World [September 2025]’
Legal Action—Why Doing Nothing Isn’t a Viable Strategy
Back in May, we reported on an HR Research Institute report which found that pay equity and pay transparency laws are currently considered the most difficult to comply with of all U.S. employment laws. Additionally, a separate question in the survey placed “changing interpretations of laws” as the greatest difficulty in keeping up with HR compliance-related laws.
Unfortunately, while keeping track of the nuances of these laws is undoubtedly a common struggle, and one that compounds with the size of your operations, complexity itself is not a defense, and the cost of getting this wrong has changed. This isn’t just a filing you can miss and quietly correct next quarter.
Current legal action speaks to this. Nike was recently ordered to pay $20,000 USD in back pay and $7.5 million in punitive damages to a former engineer who alleged she was paid less than male colleagues and promoted more slowly due to her gender. Meanwhile, the EEOC has ordered a metallurgical manufacturer to pay $2.8 million for routinely assigning female manufacturing workers to lower-paying jobs, “even though the male-dominated positions required no prior experience and they involved similar work.” The EEOC continues to pursue these kinds of actions—in June it announced it would be suing the University of Texas Medical Branch on a substantially equal work basis.
For an example from the European Union, we can look to Germany, where the Regional Court of Bochum (Germany’s sixth largest city) awarded a plaintiff €143,155 plus interest in backpay. In this case, the female plaintiff was a managing director with an identical contract and (as argued by the plaintiff) equivalent responsibilities to a male counterpart, but a salary of €150,000 versus his €180,000.
Though the two individuals were responsible for different business units, the court ruled that the activities of both managing directors constituted equivalent work in the meaning of Germany’s wage transparency laws. It went on to conclude that the employer was unable to adequately refute the plaintiff’s claim that the salary difference was as a result of gender discrimination.
The German Federal Labour Court later also held that women can establish a presumption of sex-based pay discrimination by showing males performing equivalent work were paid more. This effectively shifts the burden to the employer to prove pay is based on objective factors.
Despite what the push against affirmative action and DEI in the U.S. may suggest, regulators at home and abroad remain active, courts are less forgiving of thin documentation, and pay equity issues left unaddressed don’t stay small—they compound. Doing nothing or doing only the bare minimum carries as much risk as it ever did.
FURTHER THOUGHTS ON PAY EQUITY | ‘The Shrinking Dollar: Why the Gender Wage Gap is Widening Again’
Why Is This So Hard to Manage Internally?
Complex problems are rarely best tackled without support, and three factors make this a particularly difficult-to-manage issue:
- Constant motion: We’re in the middle of a period of constant flux for pay equity and transparency law. This is thanks to the uncertainty of implementation in the EU, and the momentum behind state and national governments participating in the overall trend. Laws have been finalized only to be delayed, and draft bills that seem a certainty may take years to become a reality, with copious amounts of red pen on them when they do. Early preparation may put you at an advantage, but there’s always a chance the goalposts will move.
- Inconsistent thresholds and mechanics: Requirements typically trigger at a range of employee counts—10, 50, 100, and so on. This is only straightforward to apply to your organization if this is a count of total employees. Often, it’s instead about the number of employees resident in the specific jurisdiction, or reporting to premises based there. This requires you to have a handle on the precise shape of your organization and its reporting lines. Furthermore, where one country wants a job-to-job comparison of substantially equal roles, another may want full regression modeling for “work of equal value.”
- Statistical rigor requirements: As we’ve previously discussed, the European Union’s approach to pay analytics isn’t exactly 1:1 with the approach we’re used to in the U.S. One key difference is the concept of job “value”, which is based on intrinsic skills, effort, responsibility, and working condition criteria, rather than market forces or market comparisons. Nonetheless, in general, compliance worldwide is about defensible statistical analysis: methods such as regression models, rank-sum tests, cohort comparisons, and significance testing. Requirements vary from jurisdiction to jurisdiction, and require a statistician rather than an HR generalist.
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How Affirmity Helps
This is exactly the gap Affirmity’s compensation and pay equity analysis software and services were built to close. Rather than treating each jurisdiction as an interchangeable project, we tailor our methodology to the unique requirements of every state and country where you operate:
- Data validation and preparation: ensuring every analysis is grounded in accurate, complete, and consistent data.
- Job class and category grouping: aligning your workforce into the comparison structures each regulation requires.
- Country-specific statistical analysis: applying the correct methodology across jurisdictions, from job-to-job comparison and regression to rank-sum testing and cohort analysis.
- Prioritized, statistically significant findings: focusing your attention on real risk, not just surface-level disparities.
- Executive summaries and defensible reporting: documentation built to withstand scrutiny, not just satisfy a checklist.
- Dedicated PhD statistician consulting: translating analysis into clear, actionable guidance, included on every engagement.
Ready to protect your organization on a global scale? Contact our team of experts today, and build a program that keeps pace with changing laws wherever you operate.
About the Author
Kim Hendon oversees account management and sales for Affirmity. She is responsible for building successful, long-term partnerships with clients and generating new business. Having served with the company for more than 25 years, Ms. Hendon has in-depth knowledge and broad experience in all areas of workforce analytics and HR compliance.
Ms. Hendon assists clients with the planning and development of workforce compliance and non-discrimination programs, as well as employee engagement initiatives. She holds a Bachelor of Arts in Speech Communication and a Master’s in Business Administration. Connect with her on LinkedIn.