Pay Gap and SAP systems

In most Polish companies, pay levels for specific positions are not disclosed to employees. They are regarded as part of the employment contract that should remain strictly between employer and employee. In some cases, employees are even required to sign a confidentiality clause prohibiting them from disclosing their earnings. Talking about money is considered impolite even during a job interview, although salary is one of the most important factors influencing an employee’s decision to work for a company.

As a result, employees in only 4% of Polish companies know their pay scales, and in fewer than 20% they have access to the average pay ranges for individual positions. Such issues are not unique to Poland – they also occur in other EU countries. This lack of pay transparency is considered one of the reasons for the persistent gender pay gap – the difference between the earnings of women and men. According to Eurostat, in 2021 the average gender pay gap in the European Union was 12.7%, while in Poland it stood at 4.7%.

In 2023, the European Parliament and the Council adopted Directive (EU) 2023/970 on strengthening the application of the principle of equal pay for men and women for equal work or work of equal value through pay transparency and enforcement mechanisms. Member states must transpose its provisions into their national legal systems by 7 June 2026. The Polish government is currently preparing a draft law to implement the directive.

The principle of equal pay is not new in EU or national law, but the lack of pay transparency has so far seriously hindered its practical application. The directive’s main objective is to address practical issues related to pay discrimination and the pursuit of related claims. It aims to require greater transparency from employers regarding pay practices and to ensure equal pay for women and men.

The directive applies to employers in both the private and public sectors. It is not yet known whether, at the implementation stage, the Polish legislator will extend the scope of the new requirements to include individuals employed under civil law contracts. The first parliamentary draft bill, ultimately not adopted, provided for such a possibility.

The directive introduces an obligation to ensure pay equality, including at the recruitment stage (pay ranges in job postings, before the interview), as well as obligations concerning internal pay structures.

Employers will no longer be allowed to include pay confidentiality clauses in employment contracts, and employees will, to a certain extent, have the right to discuss their earnings – but only for the purpose of enforcing the principle of equal pay.

Where pay inequalities are identified, employers will be required to carry out a pay review and take corrective measures to eliminate gender-based pay discrimination.

The rights of employees who experience gender-based pay discrimination will remain legally protected – they will be entitled to damages or compensation for non-pecuniary loss, with no cap on the amount.

In court proceedings concerning pay discrimination, the employee will only be required to establish facts from which a breach of the principle of equal treatment may be presumed, while the burden of proving the absence of pay discrimination will rest with the employer (reversed burden of proof).

Job advertisements and job titles should be gender-neutral, and the recruitment process should be non-discriminatory.

Pursuant to the Directive, employers will be subject to new reporting obligations covering information on pay. Reports will be submitted to the monitoring authority to be designated under national legislation.

If the report shows a difference of at least 5% in the average level of pay between women and men in any category of employees, and if that difference is neither justified by objective criteria nor eliminated within six months of the submission of the report, the employer shall, among other things, be obliged, in cooperation with employees’ representatives, to conduct a joint pay assessment with the aim of eliminating such difference.

Therefore, in order to minimize the risk, it is advisable to carry out such an assessment and to eliminate unjustified pay differences before the beginning of the period for which the employer will be required to prepare the first report. Companies employing 150 or more people will be required to submit their first report by 7 June 2027 (covering data for 2026). Companies employing between 150 and 249 people will be required to report every three years, while larger entities employing 250 or more people will be subject to an annual reporting obligation. For clarity, smaller companies employing between 100 and 149 people will have more time – until 2031.

Companies that handle their HR and payroll processes through SAP solutions should begin preparing their systems for the new reporting requirements without delay.

For organizations using SAP systems, this will mean implementing changes at both the technical and business levels. Companies should ensure that their HR and payroll data is complete, consistent, and ready to be presented in the required format.

In the Compensation module, SAP SuccessFactors offers tools to support reporting in line with the criteria adopted within the company.

It should be noted, however, that the platform alone does not resolve the entire issue. What is essential is to develop a methodology that allows reports to be prepared in a reliable and transparent manner and supports the explanation of potential pay differences. The Directive also imposes an obligation to respond to an employee’s requests concerning his or her individual level of pay and the average level of pay broken down by gender, in relation to categories of employees performing the same work or work of equal value.

This also entails the need to carry out a business project including:

• analysis of the organization’s pay policy,
• determination of the parameters and criteria on which the report will be based,
• preparation of explanatory reports on deviations and exceptions (e.g. related to seniority, experience or scope of responsibility).

For SAP HR and payroll systems (SAP HCM/HR, SuccessFactors), All for One Poland is preparing an add-on that will support the preparation of the report required under the Directive and its submission to the competent monitoring authority.

Our service package will include the SAP HR add-on, its implementation and configuration, as well as business consulting to support the company in preparing the parameters and criteria of the report.

We encourage you to contact us today!

Jolanta Zarzecka-Sawicka, Partner, Legal Counsel, Labor Law Team Leader at Grant Thornton adds: “The provisions implementing the EU directive commonly referred to as the Gender Pay Gap Transparency Directive should enter into force in Poland no later than June 2026. Local legislations will be required to impose on employers the obligation to align pay levels for the same work or for work of equal value in order to eliminate the pay gap. In addition, the pay gap will be subject to reporting.

It is worth preparing for this reform well in advance, as it will often require the implementation of a comprehensive system for collecting and disclosing data, job structuring and segmentation, and, most importantly, the job evaluation and the introduction of systems for calculating the pay gap. Employers should already be reviewing their internal regulations, employment contracts and confidentiality clauses (which will be prohibited to some extent), and implementing pay ranges. It will also be necessary to prepare documents containing the information that employees may request, as well as to review published job advertisements. Equally important is the proper collection of data required for preparing reports and the designation of persons responsible for this process. It is recommended to assess the employment structure and pay structure, taking into account employees’ gender and qualifications, as well as to carry out job evaluation.

An important element of preparation should also be the introduction of pay progression, i.e. career paths within the organization, as well as the precise description of positions and the criteria influencing pay levels. An additional step that may facilitate the implementation of the new regulations is the organization of training for employees – in particular HR departments – on the new obligations of employers and the rights of employees."