(No) Direct application of the EUPTD in domestic law as of 7 June 2026 2.0

1. Status Quo: Transposition of the EUPTD in EU Member States

The legislative processes for the transposition of the EUPTD into national law are currently still at the procedural stage in most EEA states. For an up-to-date overview of the status quo in the individual Member States, please also refer to our regularly updated FAQs (EU Pay Transparency Directive – FAQ) as well as the Deloitte EUPTD Transformation Tracker (Deloitte EUPTD Transformation Tracker).

(Partial) implementation has so far been carried out by the legislators in:

• Belgium (see Overview Belgium),
• Italy (see here),
• Lithuania (see Analysis Lithuania),
• Malta (see Update Malta),
• Poland (see Overview Poland), and
• Slovakia (see Analysis Slovakia).

By contrast, the legislators in Denmark (see Denmark Perspective), France (see here), the Netherlands (see Netherlands Overview) and the Czech Republic (see Czech Republic Overview) announced in the first half of 2026 that transposition into national law will (at the earliest) take place as of 1 January 2027.

The Swedish legislator has likewise announced implementation no earlier than 1 January 2027 and has additionally initiated discussions on a substantive revision of the EUPTD (see Sweden Overview).

2. General Principle: No Direct Horizontal Effect of EU Directives under National Law

Pursuant to Article 288(3) TFEU, EU directives are binding upon Member States as to the result to be achieved, while leaving to the national authorities the choice of form and methods. Unlike EU regulations, directives do not apply directly “in the Member States” but rather “to the Member States” as their addressees.

Accordingly, non-state legal entities – in particular private law entities – are affected by directives that have not been properly implemented only indirectly, namely through a directive-compliant interpretation of the relevant national law.

The absence of direct (i.e. horizontal) effect of directives has consistently been confirmed by the case law of the Court of Justice of the European Union (CJEU), in particular since the judgment in Paola Faccini Dori (C 91/92).

3. Exception: Direct Vertical Effect in Individual Cases and Affected Employers

In individual cases, an exception may apply if (1) the deadline for transposition has expired without full and proper implementation by the Member State, and (2) the relevant provision of the directive is unconditional and sufficiently precise.

In such cases, the CJEU has, since its judgment in Marshall (Case 152/84), recognised a direct effect of directive provisions in the field of employment law with respect to employment relationships involving organisations or bodies that are subject to the authority or control of the State and are endowed with special powers beyond those applicable in relations between private individuals.

This includes territorial authorities and entities which, irrespective of their legal form, have been entrusted by a public authority with the provision of a service in the public interest under state supervision.

In addition, the German Federal Labour Court (Bundesarbeitsgericht, BAG), in an earlier decision of 18 February 2003 (1 ABR 2/02), requires that the conduct of the entity must be capable of being influenced by public authorities or that the employer is vested with special rights in respect of its employment relationships which go beyond those applicable to private relationships.

Under these principles, the following employers are, in particular, subject to the direct effect of the EUPTD:

• Ministries,
• Public authorities within the meaning of Section 1(4) of the German  Public Administration Procedure Act (Verwaltungsverfahrensgesetz, VwVfG).
• Private-law entities entrusted with the exercise of public functions (e.g. security companies at German airports performing security checks on behalf of the Federal Police; officially accredited inspectors conducting vehicle roadworthiness testing).

By contrast, such direct effect does not apply to entities whose shareholders are exclusively public law entities but which do not perform sovereign tasks and are not vested with sovereign powers, such as:

• entities providing leisure and/or sports activities (e.g. swimming pools, operators of sports facilities),
• municipal utilities (except where acting as network operators),
• rescue services organised as private-law entities.

Direct vertical application of the EUPTD following the expiry of the transposition deadline is therefore limited to those provisions which are unconditional and sufficiently precise and do not require further legislative specification. These provisions have been identified in our EUPTD Client Alert 05/2026: (No) Direct application of the EUPTD in domestic law in the event of failure to transpose it within the prescribed period | Deloitte Legal Germany.

4. Indirect Application via Directive-Compliant Interpretation

Employers that do not qualify as state entities must observe the principle of directive-compliant interpretation when applying the German Pay Transparency Act (EntgTranspG I).

The legal classification, practical application and scope of directive-compliant interpretation under the EUPTD have been analysed in detail in our EUPTD Client Alert 05/2026: (No) Direct application of the EUPTD in domestic law in the event of failure to transpose it within the prescribed period | Deloitte Legal Germany.

5. Limitations of Directive-Compliant Interpretation

The following EUPTD requirements cannot be applied, prior to their formal implementation into domestic law, by way of a directive compliant interpretation of the German Pay Transparency Act (EntgTranspG I):

• Extension of the scope of persons entitled to request pay information under Section 10(1), sentence 1 EntgTranspG I to include job applicants pursuant to Article 5(1) EUPTD.Section 10(1), sentence 1 EntgTranspG I designates only employees as persons entitled to request such information, and the definition of employees in Section 5(2) EntgTranspG I does not, even based on its wording, allow for an extension to job applicants.Contrary to views occasionally expressed in compensation practice, such a right to information for job applicants does also not arise from Article 157(1) TFEU, pursuant to which EU Member States (including Germany) are required to ensure the application of the principle of equal pay for men and women for equal work or work of equal value.
• Extension of the scope of remuneration components subject to disclosure under Section 10(1), sentence 3 EntgTranspG I—currently limited to the average monthly gross salary and up to two additional remuneration components—to all components of pay pursuant to Article 3(1)(a) EUPTD. The wording of Section 10(1), sentence 3 EntgTranspG I does not permit such an extension of the scope of information to all components of pay. Here again, such an extension cannot be derived—contrary to certain views expressed in compensation practice—from Article 157(1) TFEU.
• Joint pay assessments with employee representatives (i.e. works councils or staff councils in the case of public employers that do not qualify as state entities within the meaning of Section 2 above) pursuant to Article 10 EUPTD. While, under the current provisions of the German Works Constitution Act (Betriebsverfassungsgesetz – BetrVG), the works council has a right to inspect gross salary lists as well as co determination rights regarding pay structures under Section 87(1) nos. 10 and 11 BetrVG, these co determination rights do not include the discussion framework set out in Article 10(2) EUPTD.Likewise, the staff representation laws applicable to individual non state public employers do not provide for consultation rights corresponding in substance to the framework defined in Article 10(2) EUPTD.

6. Particular Challenges for Cross-Border Employers

Employers with cross-border operations in EU Member States that have already transposed the EUPTD face the specific challenge that national implementing provisions may already apply to certain employment relationships.

The applicability of such provisions depends on the law governing the employment relationship and the legal entity. Relevant case constellations have been analysed in our EUPTD Client Alert 10/2025.

The specific provisions enacted by legislators—particularly in Italy, Lithuania, Poland, and Slovakia—in the course of implementing the EU Pay Transparency Directive (EUPTD) into national law (both as instances of gold-plating and as restrictive deviations from the EUPTD) are outlined in an overview contained in the presentation for our webcast of 3 June 2026: View webcast presentation (03 June 2026).

7. Outlook

The recommendations set out in our EUPTD Client Alert 05/2026 ((No) Direct application of the EUPTD in domestic law in the event of failure to transpose it within the prescribed period | Deloitte Legal Germany) remain unchanged. Employers should closely monitor the national legislative process and, once the first draft legislation has been published, further accelerate internal implementation planning and related measures. In any case, employers must closely monitor the domestic legislative process for the implementation of the EUPTD and, following the publication of the first draft bill, continue to press ahead with internal planning and the relevant steps for implementation.