Denmark’s Bill to Implement the EU Pay Transparency Directive Sent for Public Consultation

After a long wait, Denmark’s Ministry of Employment has released a bill for consultation on the implementation of the EU Pay Transparency Directive (“Directive”). The deadline for submitting consultation responses is March 27, 2026. 

The consultation coincides with a parliamentary election, which was called on the same day. However, current reports suggest that the process will continue as planned.

The draft bill mimics the Directive in many aspects (e.g., pay transparency requirements, individual rights, and joint pay assessments). However, the draft bill contains several Danish-specific nuances: 

Delay of entry into force and reporting deadlines

According to the draft bill, the law shall enter into force on January 1, 2027, which is after the Directive's June 2026 implementation deadline. Employers that fall under any reporting obligations will enjoy a year’s reprieve. Employers with 150 or more employees will be required to report salary information for the first time on September 1, 2028, based on pay data for the 2027 calendar year. This is a year delay compared to the timeline set out in the Directive. 

Parameters for assessing equal work and work of equal value

Under existing law, employers with more than 35 employees must report pay data to Danmarks Statistik, a government statistics authority. Employers are required to analyze and report on positions where more than 10 employees of each gender perform the same job, meaning they have the same DISCO codes.¹

The legislative notes of the draft bill indicate that it is ultimately up to employers themselves to determine which employees perform the same work or work of equal value, taking into account the obligations regarding gender-neutral criteria set out in the law and the Directive. Although DISCO codes still have their place in the regulation, it has been established in the preparatory work that categorization based on DISCO codes will often not be sufficient.

The draft bill indicates that criteria used to evaluate comparative employees must include skills, effort, responsibility, and working conditions and, where relevant, any other factors relevant to the specific job or position. In addition, the draft bill explicitly states that relevant soft skills must not be underestimated, including collaboration skills, communication, social and emotional competencies, informal responsibilities, and knowledge sharing.

Per the draft bill, employers should evaluate the criteria with an employee representative, who is defined as an elected shop steward. However, there is no requirement for a company to elect an employee representative if the employer is not under any other legal obligation to have one. 

Defining the role of Danmarks Statistik and extending Directive reporting thresholds

The current rules on gender-segregated wage statistics will be replaced by rules on wage reports to align with the Directive’s reporting obligations. The draft bill introduces thresholds that will be new to small-to-medium sized Danish employers. As noted above, current law requires Danish employers with more than 35 employees and at least 10 employees of each gender performing the same work to report pay data to Danmarks Statistik.

The new rules require companies with at least 100 employees report on the wage gap between men and women who perform the same work or work of the same value. Employers will be able to report wage information to either Danmarks Statistik or existing employer organizations, which will then prepare a wage report for the company at no charge. In certain circumstances, the employer may be required to prepare the wage report themselves. In all cases, it will be the employer's responsibility to ensure that the wage report is accurate.

The draft bill proposes to extend the Directive’s reporting obligation to companies with 50-99 employees if the company has employed eight of each gender in the same employee group calculated according to the 6-digit DISCO code or an equivalent classification system. This part of the implementation goes beyond the minimum requirements of the Directive, which only requires companies with 100 or more employees to report salary information. The thresholds in the draft bill are a compromise between unions and employer organizations in light of the existing 35-employee threshold under current law.  

The proposed reporting schedule is:

• Companies with more than 250 employees must report salary information for the first time on September 1, 2028, and every year thereafter.
• Companies with 150-249 employees must report salary information for the first time on September 1, 2028, and every three years thereafter.
• Companies with 100-149 employees must report salary information for the first time on September 1, 2031, and every three years thereafter.
• Companies with 50-99 employees that have employed 8 of each gender in the same employee group calculated according to the 6-digit DISCO code or an equivalent classification system must report salary information for the first time on September 1, 2031, and every three years thereafter. 

Clarification of burden of proof and suspension of limitation period

The Ministry of Employment is using the draft bill as an opportunity to clarify the burden of proof for equal pay claims. If an employee brings a claim for equal pay before the courts, and there is evidence that the employer did not fulfill its obligations under what is now the draft bill, the burden of proof shifts to the employer to prove that the employer has paid equal pay to men and women in accordance with the law. However, this shift will not apply if the employer can show that the failure to fulfill its obligations was clearly unintentional and of minor importance. 

Claims for equal pay expire five years after the employee is or should have been aware of the claim. To align with Article 21 of the Directive, the draft bill proposes adjusted statute of limitations timeframes: 

• the statute of limitations period will be temporarily suspended for six months from the date on which the employee informs the employer of the claim.
• regardless of the five-year limitation period, the limitation period will not expire until one year after the date the temporary suspension begins.

Preemption through collective agreements

Similar to previous laws implementing EU directives, the draft bill proposes that the law will not apply if there are corresponding rights and obligations laid down in a collective agreement. However, it is difficult to predict how the rights and obligations will be integrated into collective agreements. Employers may face challenges related to mixed workforces where some employee could be covered by the rules of the collective agreement and others by the implementing law. 

Employer takeaways

The draft bill for the transposition of the Directive into Danish law provides for minimum implementation, which, among other things, gives individual companies a certain degree of discretion. However, this also leaves employers without a clear set of guidelines to determine equal pay principles. 

Fortunately for Danish employers, the anticipated effective date is later than the Directive’s specified implementation deadline. This seems appropriate in view of the need for preparation on the part of companies that are only now receiving insight into how the government intends to implement the Directive. 

As the draft bill generally follows the baseline obligations set by the Directive, employers are advised to start now to draft or adjust their pay policies in accordance with the Directive. In addition, companies with more than 149 employees would be well advised to use the extra time provided by the delayed effective date to identify and resolve any unjustifiable pay gaps before those differences appear in the 2027 pay data. 

We are closely following the consultation and legislative process.