Pay Transparency for Employees in Light of the GDPR
In this article, we explain how to reconcile the obligation of pay transparency with the protection of personal data and what employers should pay attention to.
What does the new obligation of pay transparency involve?
The new regulations introduce a number of obligations for employers aimed at increasing transparency and reducing the pay gap, particularly with regard to gender. The key obligations include:
- salary ranges (or information on how remuneration is determined) already at the job advertisement stage,
- employees’ right to obtain information on average pay levels within the organization - broken down by gender and job categories,
- a ban on asking candidates about their salary history from previous employers.
These changes mean a significant redefinition of the existing standards of pay-related communication within companies.
Remuneration as personal data - the GDPR perspective
From the GDPR perspective, information about remuneration constitutes personal data, as it is an element that allows for the identification of a natural person, and relates to their professional and economic situation. This means that:
- its processing must have a legal basis,
- it should be adequate and limited to the intended purpose,
- it must comply with the principles of data minimization and confidentiality.
At first glance, pay transparency may seem to conflict with privacy protection principles. In practice, however, the new regulations provide a lawful basis for processing pay related data in strictly defined situations, such as recruitment or internal reporting.
Transparency vs. anonymization - key employer obligations
It is particularly important to note that employees’ access to pay information does not mean the disclosure of individual salaries of specific persons. Such data should be:
- presented in an aggregated form,
- properly anonymized,
- made available in a way that prevents the identification of a specific employee.
This is especially crucial in smaller teams, where even aggregated data may lead to indirect identification of individuals. In such cases, employers should implement additional technical and organizational measures, such as combining job categories or limiting the scope of disclosed information.
Gender pay gap reporting and the GDPR - another challenge
The phased implementation of the directive also provides for further reporting obligations, including:
- reporting on the gender pay gap,
- submission of the first reports by June 2026 (depending on the size of the organization).
This entails the need to prepare HR and financial systems for the collection, analysis, and reporting of pay data in a GDPR compliant manner. In practice, this often requires a review of internal procedures, data protection policies, and any used IT tools.
Summary - how to reconcile pay transparency with the GDPR?
The new pay transparency regulations represent one of the most significant labor market reforms in recent years. Their aim is to increase transparency and pay equality - not to infringe on employees’ privacy.
From a GDPR perspective, these regulations are not inconsistent with personal data protection principles, provided that the employer:
- acts on a clear legal basis,
- applies the principle of data minimization,
- implements effective anonymization and security measures,
- adapts HR and reporting processes to the new requirements.
Proper preparation of the organization at this stage will not only ensure compliance with legal obligations but also strengthen the employer’s image as transparent and responsible.
Crowe Poland can support your organization at every stage of this transformation, helping not only to meet legal requirements, but also to streamline processes and build a culture of transparency.
