Gender pay gap: the difference in remuneration between women and men in the public sector

If the public sector has been publishing its pay scales for years, where does the pay gap come from? Top-down salary ranges are not the same as equal pay. At every stage, from recruitment to bonus payments, women and men encounter different points on the same scale. So where is this gap really hidden, and what does the EU Pay Transparency Directive now require from public institutions?

Does the EU Pay Transparency Directive cover the public sector?

Yes, without any exceptions. The requirement covers all employers, public and private. Ministries, local government offices, universities, hospitals, and agencies are subject to it exactly the same way as any private company. Recruitment provisions, such as the obligation to provide candidates with salary ranges and the prohibition of asking about salary history, apply to every public employer regardless of the organization's size. The obligation to report the pay gap applies to larger employers, according to employment thresholds and an implementation schedule that each Member State sets in its own implementing act. The Directive introduces this obligation gradually: first for the largest employers, then for smaller ones. Most public entities meet the requirements for full pay gap reporting. Although, regardless of this, employers are theoretically obligated to treat employees equally anyway. The starting point is therefore simple: being a public entity does not exempt you from transparency requirements.

What causes the higher risk in the public sector?

We are dealing here with a certain asymmetry, which in this case works to the disadvantage of the public sector. When a Member State is late in transposing EU requirements into national law, a private sector employer can argue that the obligations are not yet enforceable against them until national legislation is adopted. A public entity cannot invoke this, because under EU law, a directive can be directly applied against the state and its constituent bodies as soon as the implementation deadline passes. This deadline was June 7, 2026. From this date, an employee of a public institution can, in principle, invoke sufficiently clear provisions of the Directive against their employer, even if the national law is still a draft. The same delay that gives private employers time to implement does not apply to public institutions. That is why in the public sector, waiting for national law is a riskier option, not additional time.

What is "direct effect" and how does it impact the difference between the public and private sector?

Direct effect is the legal principle behind this asymmetry. After the implementation deadline, a directive's provision can be directly enforced against the state and entities managed "by the State," provided that the provision is unconditional and sufficiently precise. Public universities, hospitals, local government units, and government agencies generally fall within this definition, while private companies do not. The practical consequence, however, is clear: a public institution that has already updated job descriptions, conducted job evaluations, and can document how salaries are determined is protected regardless of when national law appears. One that has done nothing becomes vulnerable the moment the deadline passes.

What is the pay gap in the public sector?

The public sector often starts from a position that most private employers could envy: for regulated employees, pay scales are formalized, rates are included in published categories and grading tables, and the principle of equal pay for equal work is embedded in the system. However, this structure usually covers only a portion of employees. Regulated positions are subject to the table, while others, from senior management to specialists and employees on individual contracts, are shaped outside of it and their salaries are much less transparent. The overall, comprehensive difference in remuneration between men and women in a public entity may therefore appear small precisely because its regulated core is transparent, while real disparities are hidden where the table does not reach. Even within the table, the gap rarely lies in the basic rate itself, where two people at the same grading level receive the same hourly rate. It hides in the spaces around it: in pay progression, where seniority and discretionary raises move women and men through grading categories at different rates, and in allowances and variable components that are not distributed evenly. Above all, it hides in vertical segregation: women are concentrated at lower grading levels and in feminized functions such as administration, care, and teaching support, while men are overrepresented in managerial and higher-paid positions, causing the average pay levels of the two groups to diverge, even if no single pay decision seems unfair.

Equal pay in the public sector - necessary actions

None of the above reasons is an argument for waiting, and for public entities, as we know, waiting is a riskier option. The answer lies in actions that the public sector must take today. It starts with the foundations on which every calculation depends: up-to-date job descriptions for all roles, regulated and not, and gender-neutral job evaluations based on the four criteria listed in the Directive. On this basis, we ensure that salaries throughout the organization, including in positions outside regulated tables, are based on consistent, gender-neutral criteria, so that pay ranges and promotion rules can be explained, not justified ex post. Only then does pay gap analysis make sense, when work of equal value can finally be compared, pay data within grading categories can be read, and everything established outside of them can be examined. Performing this analysis across the entire organization, calculating the gap in each category, and comparing the adjusted indicator with the overall one, is a task for which a platform like PayGap is designed. Where a category shows a gap of at least 5% and it cannot be justified, the Directive requires a joint pay assessment with employee representatives; in the public sector, this means involving trade unions in the process, not just informing them of the results. Since the direct effect of the Directive already applies to public entities, the time to start is now, not when national law finally comes into force.

Gender-neutral job evaluation - EU and national requirement

It's not about forcing every role into a single grading level or having an administrative employee earn as much as a teacher or doctor. The Directive does not require a uniform pay structure, and regulated groups can keep their own tables. However, it does require that the value of work be assessed according to the same objective, gender-neutral criteria throughout the organization. A municipality comparing an administrative employee with a technician, a school comparing a teacher with support staff, a hospital comparing a nurse with a specialist: the point is not to eliminate these differences, but to see them clearly, identify positions of truly equal value, ensure their equal remuneration regardless of who holds them, and justify differences between groups on objective grounds, not by force of habit. The risk that the Directive warns against is more subtle than comparing one profession with another: it concerns positions predominantly held by women, valued and remunerated below other positions of truly equal value.

Public sector, company boards - where to start

Step 1. Check what you have. Map employment and pay data: which positions are subject to regulated tables, which have individually determined salaries, where are allowances and variable components located, and what do the current figures actually show.

Step 2. Update the structure. Bring job descriptions and role architecture up to date, so that every position, regulated and not, is described by what it actually does, and not by an old title.

Step 3. Valuation. Evaluate these positions according to the same objective, gender-neutral criteria, group them into categories of work of equal value, and establish a pay logic that you can explain. This is the most demanding step, because the Directive requires evaluating each position according to four criteria: competence, effort, responsibility, and working conditions (Art. 4), applied consistently and without undervaluing soft skills so often attributed to positions held by women.

Step 4. Reporting. Calculate the pay gap in each category, prepare a full set of indicators from Art. 9, and where the gap in a given category exceeds 5% and cannot be justified, conduct a joint pay assessment with employee representatives and trade unions. Analyzing the full set of indicators from Art. 9, handling individual cases, and generating employee reporting required by the Directive is an area where the burden of work is taken on by PayGap, a pay transparency verification platform.

Steps two and three are where public entities most often need support, and this is exactly the work that Symmetria Partners performs with employers. Describing and evaluating very different positions, building pay structures that stand the test of time, and conducting conversations with trade unions. You can see how we did this in a recent project at a public institution, and the implementation plan is described in our step-by-step guide to the Pay Transparency Directive. For the calculation itself, refer to our guide on calculating the pay gap.

FAQ

What are the consequences for a public entity that fails to comply with the Directive?

The consequences are legal, financial, and reputational. National law sets sanctions, such as fines. A greater risk is associated with the reversal of the burden of proof: an employer who has failed to fulfill pay transparency obligations must prove that the pay difference is not discrimination. For a public entity, the reputational cost of a visible pay gap or a pay discrimination claim is often the most serious of all.

Does the Directive end pay confidentiality in the public sector?

Yes. The Directive prohibits pay confidentiality clauses, so an employer cannot prevent employees from disclosing their own earnings, and employees gain the right to demand information about their own pay level and about average pay levels for comparable positions, broken down by gender. A significant portion of public sector salaries is already published in tables, but the Directive extends this transparency to positions that were not previously subject to such tables.

Do small municipalities and schools below the reporting threshold need to do anything about pay for men and women?

Yes. Only the obligation to report the pay gap depends on the employment threshold. Transparency provisions, such as stating pay ranges in job advertisements, prohibiting asking candidates about salary history, and the right to demand information about pay, apply to every public employer regardless of the size of the organization. A small school or municipality is not exempt from these provisions; it simply has fewer reporting obligations.

How can a public institution reduce the pay gap?

By addressing the causes, not just the overall indicator. This means consistent job descriptions and gender-neutral valuation to compare work of equal value, fair pay progression rules so that women are not held back at lower grading levels, and equitable distribution of allowances and variable components. Where the gap in a given category exceeds 5% and cannot be justified, a joint pay assessment with employee representatives identifies corrective measures. Eliminating real pay disparities also lowers the risk of pay discrimination claims.