EU Pay Transparency Directive 2026 in Malta: The Time Has Come — Here Are the Specific Rules and How They Affect You

The EU Pay Transparency Directive is no longer something employers in Malta can treat as a future deadline. The time has come.

Malta has now implemented the Directive through the Equal Pay (Transparency and Reporting) Regulations, 2026, introduced by Legal Notice 173 of 2026. The rules were published in the Government Gazette on 5 June 2026 and came into force immediately.

For employers, this means salary decisions must become clearer, more structured and easier to justify. For employees and jobseekers, it means stronger rights to understand how pay is set and whether equal pay is being respected.

In simple terms: pay transparency is now part of doing business in Malta.

This article is for general information only and does not constitute legal advice.

What is the EU Pay Transparency Directive?

The EU Pay Transparency Directive is an EU law designed to strengthen the principle of equal pay for equal work or work of equal value between women and men.

The logic behind the law is simple. If salary systems are hidden, unfair pay differences are harder to identify and challenge. By making pay information more transparent, the Directive aims to reduce gender-based pay discrimination and help close the gender pay gap.

The rules affect three main areas:

recruitment and job applications;
employee rights during employment;
gender pay gap reporting and corrective action for larger employers.

The Directive does not mean that everyone doing similar work must always receive exactly the same salary. Pay differences can still be lawful where they are based on objective, gender-neutral and bias-free criteria, such as skills, responsibility, performance, competence, seniority, qualifications or working conditions.

What changes is that employers must be able to explain those differences clearly.

Why this matters for Malta

Malta’s labour market is highly competitive, especially in sectors such as hospitality, retail, construction, professional services, financial services, iGaming, technology and administration.

Many employers in Malta have traditionally used broad salary ranges, individual negotiation or phrases such as “competitive salary” in job adverts. Under the new transparency rules, this approach becomes riskier.

Employers now need to know what a role is worth before hiring, explain how salary levels are set and keep better records of pay decisions.

This matters not only for large companies. While formal gender pay gap reporting applies mainly to employers with 100 or more workers, many transparency rules apply more broadly. Even smaller employers may need to review their recruitment process, pay structures and employee information procedures.

What has changed in Malta?

Malta had already started aligning its employment rules with the Directive in 2025, but the 2026 regulations complete the picture.

The new rules apply to workers in both the public and private sectors. They require employers to maintain pay structures that support equal pay for equal work or work of equal value.

The regulations also define pay broadly. Pay is not only basic salary or wages. It can include variable remuneration, bonuses, allowances and benefits, whether paid in cash or in kind.

This is important because equal pay is not only about monthly salary. A difference in bonuses, benefits, allowances or other rewards may also create a pay gap.

Salary information must be clearer for jobseekers

One of the biggest changes affects recruitment.

Job applicants must receive information about the initial pay or pay range for the role before the recruitment process is concluded. If a collective agreement applies, the relevant pay provisions must also be made available.

This means candidates should not have to go through the full recruitment process before discovering whether the salary matches their expectations.

For employers, salary planning must happen earlier. Before a vacancy is advertised or interviews begin, the employer should already know the realistic salary range for the role and how that range is justified.

For job boards and recruiters, this is also a major shift. Vacancies that include clear salary information are likely to become more attractive and more trusted by candidates.

Employers cannot ask about salary history

Employers are no longer allowed to ask job applicants about their current or previous salary.

This rule is important because salary history can carry old pay discrimination into a new job. If a candidate was underpaid in a previous role, using that salary as a reference point can continue the same unfairness.

Instead, pay should be based on the value of the role and the candidate’s relevant skills, experience and responsibilities.

Employers in Malta should review application forms, interview questions and recruiter scripts immediately. Questions such as “What are you currently earning?” or “What was your previous salary?” should be removed.

A safer approach is to discuss the candidate’s expectations in relation to the salary range of the role.

Job adverts and job titles must be gender-neutral

Recruitment processes, job adverts and job titles must be gender-neutral and non-discriminatory.

This means employers should avoid wording that may discourage certain applicants or reinforce stereotypes. The advert should focus on the actual responsibilities, required skills, working conditions and pay range.

For Malta’s recruitment market, this is especially relevant in sectors where some roles have traditionally been associated with one gender. Clear and neutral vacancy wording can help widen the candidate pool and reduce compliance risk.

Employees have stronger rights to pay information

Employees now have stronger rights to request pay information from their employer.

Workers can ask, in writing, for information about:

their own individual pay level;
average pay levels for workers doing the same work or work of equal value;
the same average pay information broken down by sex.

This right is designed to help employees understand whether equal pay principles are being followed.

Employers must provide this information in writing within a short timeframe. Reports on Malta’s new rules indicate that employers must respond within eight days, which is much faster than the general EU baseline.

Employers must also inform workers every year that they have this right and explain how they can exercise it.

This does not mean that every employee’s personal salary becomes public. Employers must still respect data protection rules. However, they must be able to provide meaningful pay information that allows workers to assess whether there may be an equal pay issue.

Workers are protected when exercising their rights

Employees must not be victimised for asking for pay information, supporting another worker or participating in proceedings related to equal pay.

This is an important part of the new rules. A right to information would be weak if employees were afraid to use it.

Employers should therefore be careful with workplace practices, confidentiality clauses or management responses that could discourage workers from exercising their rights.

Pay information must still be handled responsibly, but confidentiality cannot be used to block equal pay rights.

Pay structures must be objective

The biggest practical change for employers is the need for clearer pay structures.

Employers must be able to explain why employees are paid differently. Informal reasons such as “this is what the person negotiated” or “we needed to hire quickly” may not be enough.

A strong pay structure should be based on objective, gender-neutral and bias-free criteria, such as:

skills and qualifications;
experience relevant to the role;
responsibility level;
effort and working conditions;
performance;
competence;
seniority;
market factors, where applied consistently.

The key point is consistency.

If performance affects pay, the performance system should be documented. If seniority matters, the rules should be clear. If bonuses or allowances are paid, employers should be able to explain how they are awarded.

The Maltese rules allow salary scales that reward seniority and allow different pay where the difference is based on objective and gender-neutral criteria. But those criteria must not result in direct or indirect sex-based discrimination.

What employers with 25 or more workers should know

Malta’s rules include size-based obligations.

Employers with 25 or more workers are expected to internally document the criteria they use for pay, pay levels and pay progression.

This is especially important for Malta, where many businesses may not be large enough to fall under gender pay gap reporting rules but may still have 25 or more employees.

These employers should start creating or updating:

salary bands;
pay progression criteria;
promotion rules;
bonus and commission criteria;
documentation for pay exceptions;
internal records explaining salary decisions.

This does not mean every company needs an overly complex pay system. But the system should be clear enough to show that decisions are fair, consistent and based on objective criteria.

What employers with 50 or more workers should know

Employers with 50 or more workers have stronger documentation duties.

They are expected to establish the criteria and policies used to determine pay, pay levels and pay progression in writing, and these should be accessible to workers.

This means employees should be able to understand how salaries are set and how progression works.

Employers should review employee handbooks, HR policies, salary review processes, promotion procedures, appraisal systems, bonus schemes, commission structures and internal grading systems.

If pay progression is vague, undocumented or applied differently between departments, the risk of challenge increases.

Gender pay gap reporting: who must report?

Larger employers must prepare gender pay gap reports.

The reporting obligations are phased according to employer size:

250 or more workers: first report due by 7 June 2027, then annually;
150 to 249 workers: first report due by 7 June 2027, then every three years;
100 to 149 workers: first report due by 7 June 2031, then every three years;
fewer than 100 workers: reporting is generally voluntary.

Employers with 150 or more workers should not wait until 2027 to prepare. The first report is expected to cover the 2026 calendar year, meaning the relevant pay data is already being created now.

What must be included in pay gap reporting?

Employers should be ready to analyse more than one headline number.

Gender pay gap reporting may require employers to look at:

overall gender pay gap;
gender pay gaps by category of workers;
basic pay;
variable pay;
bonuses;
allowances;
benefits in kind;
distribution of women and men across pay levels.

For many employers, the hardest part will not be the calculation itself. The hardest part will be organising job categories properly and identifying workers doing the same work or work of equal value.

This is why employers should start with job mapping before reporting deadlines arrive.

What happens if a pay gap of 5% or more is found?

If reporting shows a gender pay gap of at least 5% in a category of workers, and the gap cannot be justified by objective, gender-neutral criteria, the employer will need to take action.

The employer may need to remedy the issue and carry out a joint pay assessment in consultation with workers’ representatives.

The purpose of a joint pay assessment is to identify, remedy and prevent unjustified pay differences between women and men.

In practical terms, employers should be ready to explain:

which categories of workers were compared;
what pay differences were found;
whether those differences can be justified;
what objective criteria were used;
what corrective action will be taken;
how similar gaps will be prevented in future.

This makes early internal pay reviews essential. It is better to identify and address unexplained gaps before they become a formal reporting, employee relations or legal issue.

Enforcement and penalties in Malta

The Maltese rules include enforcement mechanisms and penalties.

The Department for Industrial and Employment Relations is expected to act as the monitoring body in most cases. The National Commission for the Promotion of Equality is designated as the equality body.

Employees who suffer loss because of a breach of equal pay rights may be able to bring claims before the Industrial Tribunal. Compensation may include lost pay, back pay, bonuses and benefits in kind.

Breaches of the regulations may also lead to fines. Reports on the new rules indicate fines starting from thousands of euros, with higher penalties where the breach is connected to the principle of equal pay for equal work or work of equal value.

This means pay transparency is not only an HR issue. It affects management, payroll, finance, legal compliance, recruitment and internal communication.

What should employers, employees and jobseekers do now?

For employers in Malta, the priority is to move from informal salary decisions to clear, documented pay practices. This means reviewing job adverts, preparing salary ranges before recruitment, removing salary-history questions, checking pay structures and making sure managers understand the new rules.

Companies should also review how salaries, bonuses, allowances and benefits are awarded. If pay differences exist between people doing the same work or work of equal value, employers should be ready to explain them with objective and gender-neutral criteria.

For employees, the new rules provide stronger access to pay information and better protection when asking questions about equal pay. A pay difference is not automatically unlawful, but employers must be able to justify it fairly.

For jobseekers, the biggest change should be greater transparency during recruitment. Candidates should receive clearer information about pay before accepting a role and should not be asked about their current or previous salary.

In short, the new rules push Malta’s labour market towards clearer salary expectations, fairer pay structures and more transparent recruitment.

Why “competitive salary” is no longer enough

In Malta, many job adverts still use phrases such as “competitive salary” or “attractive remuneration package”.

Under the new transparency rules, this approach is becoming outdated. A stronger vacancy should include a realistic salary range, key benefits, working hours, location or hybrid arrangements, seniority level and essential requirements.

Employers can still use salary ranges and keep some flexibility, but the range should be real, clear and based on objective criteria.

For jobseekers, clear salary information helps them decide whether the role is worth applying for. For employers, it helps attract more relevant candidates and avoids wasted time during recruitment.

Practical checklist for employers in Malta

Employers should now review their internal processes and ask the following questions:

Do our job adverts include clear pay information?
Do our recruiters still ask about salary history?
Are our job titles and vacancy texts gender-neutral?
Do we have salary bands for key roles?
Can we explain how employees move through salary bands?
Are bonuses, allowances and benefits awarded according to clear criteria?
Can we identify employees doing the same work or work of equal value?
Do we know whether we fall into the 25, 50, 100, 150 or 250-worker thresholds?
Can we respond to a pay information request quickly and accurately?
Are managers trained on the new rules?
Are our payroll and HR data ready for reporting if required?

Employers that answer “no” to several of these questions should treat pay transparency as an immediate priority.

Final takeaway

The EU Pay Transparency Directive has moved from theory to practice. In Malta, the time has come.

Employers need to review how they advertise jobs, set salaries, document pay decisions and respond to employee information requests. Larger employers also need to prepare for gender pay gap reporting.

Employees and jobseekers now have stronger rights to understand how pay is set and whether equal pay is being respected.

The main message is simple: pay transparency is now part of doing business in Malta. Companies that act early will be better prepared, more compliant and more trusted by candidates and employees.

Disclaimer: This article is for general information only and does not constitute legal advice.