EU Pay Transparency Directive — What Employers in Bulgaria Must Know Before 7 June 2026

In this article you will learn

• What the Directive covers and which employers are affected
• The current transposition status in Bulgaria and what follows if the country misses the deadline
• What obligations arise before hiring, during the employment relationship, and in reporting
• How penalties are structured and how the burden of proof is allocated
• What you need to do right now — a practical checklist with specific timelines
• How the new obligations interact with GDPR requirements

What Is the Pay Transparency Directive?

Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023 establishes minimum requirements for strengthening the application of the principle of equal pay for women and men for equal work or work of equal value through pay transparency mechanisms and enforcement mechanisms.

Scope

The Directive applies to all employers in the public and private sectors. There is no minimum employee threshold for the core transparency obligations. Only the periodic gender pay gap reporting obligations are linked to a minimum workforce size (100 employees).

What Counts as “Pay”

The definition of “pay” under the Directive is broad. It includes not only basic salary but also bonuses, premiums, allowances, benefits in kind, voluntary pension contributions, company cars, housing subsidies, and anything else the worker receives directly or indirectly in connection with their employment.

Purpose

Unlike existing provisions in Bulgarian employment law — specifically Art. 243 of the Labour Code and Art. 14 of the Protection Against Discrimination Act — the Directive moves from a reactive to a proactive model. Going forward, the employer is required to prevent inequality, to prove that it has been prevented, and to report the results.

The key shift: Bulgarian law treats equal pay as a right the worker must exercise. The Directive turns it into an obligation the employer must actively fulfil.

Transposition Status in Bulgaria

What We Know as of March 2026

• No draft bill has been introduced in the National Assembly
• No proposal has been published for public consultation
• A working group at MLSP is preparing recommendations
• The working group’s internal target date is 29 May 2026 — just ten days before the deadline
• Bulgaria falls within the “red” group according to EC monitoring

What This Means for Employers

1. Direct effect for public-sector employers. From 8 June 2026, an employee of a public-sector employer may invoke the Directive directly before a Bulgarian court.

2. Consistent interpretation for the private sector. National courts are required to interpret existing provisions in light of the Directive’s objectives.

3. State liability (Francovich). If a worker suffers harm that is a direct consequence of the failure to transpose, they may bring a claim for damages against the Bulgarian state.

How Other EU Member States Compare

Practical recommendation: Do not wait for the legislator. Even if transposition is delayed, the obligations will arrive — and they may have retroactive effect on existing employment relationships.

What You Must Do BEFORE Hiring

Art. 5 of the Directive introduces three specific obligations that apply to every recruitment process.

1. Disclosing Salary or Pay Range

The employer must provide candidates with information about the initial pay level or its range — in the job advertisement itself or before the first interview.

Practical example: If you are hiring a legal counsel with 3–5 years of experience, the range could be EUR 1,800 – EUR 2,400 gross, with a note that the specific amount depends on professional experience.

2. Absolute Prohibition on Asking About Previous Pay

Art. 5(2) introduces an unconditional prohibition on asking about the candidate’s current or previous pay. This covers:

• Oral questions during interviews
• Written questionnaires and application forms
• Informal enquiries through third parties

3. Gender-Neutral Job Titles

Job titles and position descriptions must be gender-neutral. While the Bulgarian language makes full neutrality challenging, the Directive requires good-faith efforts in this direction.

Obligations During the Employment Relationship

Articles 6 and 7 establish obligations that apply throughout the entire duration of the employment relationship.

Accessible Pay-Setting Criteria

The employer must ensure easy access for workers to the criteria used to determine pay levels, pay scales, and pay progression. These criteria must be objective and gender-neutral.

Right to Information

Every worker has the right to request and receive written information about their individual pay level and the average pay levels, broken down by gender, for the category of workers performing equal work or work of equal value. The employer must respond within 2 months.

What Constitutes “Equal Work or Work of Equal Value”

The Directive establishes four criteria:

1. Skills — education, qualifications, professional experience
2. Effort — physical, mental, and emotional demands
3. Responsibility — for people, equipment, resources, decisions
4. Working conditions — work environment, hazards, working hours

If two positions are comparable across these four indicators, they are considered work of equal value — even if job titles, departments, or hierarchical levels differ.

Prohibition of Pay Confidentiality Clauses

Art. 7(5) declares void any contractual clauses that prohibit workers from disclosing information about their pay. Such clauses must be removed.

Important context: This change carries particular cultural significance in Bulgaria, where remuneration has traditionally been treated as strictly confidential. The Directive reverses this paradigm — pay transparency is not optional but obligatory.

Gender Pay Gap Reporting

Art. 9 introduces an obligation for periodic reporting on the gender pay gap.

When the Obligation Arises — by Company Size

The Nine Mandatory Data Points

1. Gender pay gap — mean value
2. Gender pay gap — median value
3. Gap in complementary or variable components — mean value
4. Gap in complementary or variable components — median value
5. Proportion of female and male workers receiving complementary components
6. Proportion of female and male workers in each pay quartile
7. Gender pay gap by categories of workers — mean value
8. Gender pay gap by categories of workers — median value
9. Proportion of female and male workers in each category of workers

Information under points 1–6 must be publicly accessible. Information under points 7–9 is provided to the competent national authority and to workers’ representatives.

Joint Pay Assessment

A joint pay assessment is mandatory when all of the following conditions are met:

1. The report reveals a pay gap of more than 5% in any category of workers
2. The employer cannot justify the gap on the basis of objective, gender-neutral criteria
3. The employer has not remedied the gap within 6 months of publishing the report

The assessment is carried out by the employer together with workers’ representatives and includes analysis, identification of gaps and their causes, remedial measures, and monitoring.

Penalties and Legal Consequences

Reversal of the Burden of Proof

When a worker presents facts from which a presumption of pay discrimination may be drawn, the burden of proof shifts to the employer. If the employer has failed to fulfil its transparency obligations, the burden of proof shifts automatically.

Uncapped Compensation

Art. 16 provides that compensation must ensure full and effective reparation, including:

• Full recovery of unpaid remuneration and related bonuses
• Compensation for lost opportunities
• Non-pecuniary damages
• Interest on late payment
• Legal costs

The Directive prohibits the introduction of a cap on compensation.

State-Imposed Penalties

Protection Against Retaliation

Workers who exercise their rights under the Directive are protected against any adverse consequences, including dismissal, demotion, transfer, or denial of promotion.

Intersectional Discrimination

The Directive introduces, for the first time in EU law, the express recognition of intersectional discrimination — the combination of gender with other protected characteristics.

Representative Actions

Trade unions and equality bodies may bring claims on behalf of workers — including collective claims.

Limitation Period

The limitation period for bringing claims is at least 3 years, running from the moment the claimant knew or could have known of the violation.

Practical Checklist — What to Do NOW

March – April 2026

• Conduct an internal pay audit — collect data on remuneration for all workers, including bonuses and complementary components
• Define categories of equal work / work of equal value using the four criteria
• Calculate pay gaps by category — mean and median values, broken down by gender
• Flag categories with a gap exceeding 5%

April – May 2026

• Update job advertisements — include a pay range, use gender-neutral job titles
• Remove questions about previous pay from all application forms and interview guidelines
• Remove pay confidentiality clauses from employment contracts and internal rules
• Document the criteria for pay determination — update the Internal Rules on Remuneration

By 7 June 2026

• Establish a procedure for responding to information requests from workers
• Prepare the text for the annual notification to workers of their right to information
• Update GDPR documentation — privacy notices, ROPA, DPIA where necessary
• Train the HR team on the new obligations

After June 2026

• Begin tracking pay data in a structured format suitable for reporting
• Build the technical capability for reporting against the nine mandatory data points
• Prepare for a joint pay assessment — identify workers’ representatives
• Monitor the legislative process in Bulgaria

Do not delay. Preparation takes months. Employers that act now will have a significant advantage. If you need legal assistance, the Innovires Legal team is at your service.

Data Protection and Pay Gap Reporting

Art. 12 of the Directive expressly refers to the GDPR. Pay data must be handled in strict compliance with:

• Purpose limitation — the data may be used solely for pay transparency purposes
• Data minimisation — only the information necessary for calculating the data points is collected
• Storage limitation — the data is retained only for as long as necessary

The Risk of Identification in Small Groups

When providing aggregated information by categories of workers, small groups create a risk of identification. In Germany, the recommended minimum is 6 individuals of each gender in a given category.

What You Need to Update

1. Privacy notices — add a new processing purpose
2. Records of Processing Activities (ROPA) — add a new processing activity
3. Data Protection Impact Assessment (DPIA) — carry out a DPIA if the processing creates an identification risk
4. Access policies — determine who has access to the aggregated pay data

Frequently Asked Questions

Conclusion

Directive (EU) 2023/970 is not another distant piece of European regulation. It is a specific, detailed, and binding instrument whose transposition deadline — 7 June 2026 — is less than three months away.

Bulgaria is unprepared. But the absence of a national law does not mean the absence of obligations. Employers that act now — conducting a pay audit, updating internal rules, removing prohibited clauses, and establishing transparency procedures — will be in a significantly stronger position.

7 June 2026 is approaching. Act now.

If you have questions or need assistance, contact Innovires Legal.

This article is for informational purposes only and does not constitute legal advice. The content is current as of the date of publication (23.03.2026). For specific legal questions, we recommend consulting a qualified lawyer. Innovires Legal accepts no liability for actions taken solely on the basis of the information in this publication.