Pay transparency in 2026: are Hungarian employers prepared for the new EU regulations?

Pay transparency in 2026: How should Hungarian employers prepare?

Why is this topic relevant in 2026?

By 2026, pay transparency will no longer be a distant regulatory concern but a pressing preparation task for Hungarian employers. Under EU Directive 2023/970, member states must transpose the new rules by June 7, 2026, with the goal of more effectively enforcing the principle of equal pay for equal work or work of equal value.

In practice, this means that transparency in pay structures, the comparability of job roles, and the objective, documented nature of the criteria used to determine pay are becoming increasingly critical for employers. While the final details will be defined by Hungarian transposition, the core obligations of the EU directive already provide a clear roadmap.

What does this mean for recruitment?

One of the most significant changes affects the recruitment phase. According to the directive, applicants must be informed in a timely manner about the starting salary or pay range for a position, based on objective, gender-neutral criteria. This information may be provided in the job advertisement, before the interview, or at another stage prior to the employment contract. Concurrently, as a general rule, employers will be prohibited from asking candidates about their current or previous salary.

For Hungarian employers, this is primarily a matter of process and risk management rather than just communication. In many organizations, pay ranges may exist informally but lack a unified system, proper documentation, or consistent application in the recruitment process. The same applies to interview questions, approval workflows, and internal decision-making logic.

What internal obligations should you prepare for?

Another essential element of the regulation is strengthening employees' rights to information. Under the directive, employees may be entitled to request information about their own pay levels as well as the average pay levels for categories of employees performing the same or equal work, broken down by gender. In this context, employers must also make accessible the criteria used to determine pay, pay levels, and pay progression.

This can be a particularly sensitive point for companies where pay has historically been determined by individual negotiation, managerial discretion, or the practices of different business units. In such cases, an organization will only be able to operate in a legally defensible manner if it can retroactively substantiate that any discrepancies are based on objective, gender-neutral, and documentable reasons.

Which employers are affected by the reporting rules?

The directive also introduces reporting obligations for certain employers. Employers with at least 100 employees will be subject to reporting requirements regarding the gender pay gap, with varying timelines. For employers with 250 or more employees, the first reporting deadline is June 7, 2027, with annual reporting thereafter. For employers with between 150 and 249 employees, the same deadline applies, but on a three-year cycle. Employers with between 100 and 149 employees must meet this obligation for the first time by June 7, 2031, and every three years thereafter.

If a pay gap of at least 5% is identified in any category of workers between female and male employees, and the employer cannot justify this with objective, gender-neutral factors or correct it within six months, the directive mandates a joint pay assessment in cooperation with employee representatives.

What should employers consider right now?

For Hungarian employers in 2026, the most important question is not whether everything needs to be overhauled immediately, but where the organization's most significant risk points lie. It is worth specifically reviewing recruitment templates, job advertisements, the logic behind pay ranges, job categories, performance appraisal and promotion systems, and the documentation of HR decisions.

Pay transparency is therefore not just a minor labor law detail, but an increasingly important area of compliance for employers. Starting preparations in time can reduce the risk of future legal disputes, internal tensions, and data reporting difficulties, while also helping the employer organize its pay practices into a more transparent, consistent, and defensible system.

Dr. Marcell Olajos

Attorney at Law

PLM Legal - Dr. Marcell Olajos Law Office