Hungary is preparing to enter a new era of salary transparency in the labor market, as it is set to implement strict rules regarding the disclosure of salary information and equal pay between women and men, in accordance with EU Directive 2023/970. The new legislative provisions, will bring major changes for both employers and employees, aiming to eliminate salary discrimination and to ensure a fairer working environment with complete transparency of salary information.

What Changes Do the New Regulations Bring?

For Employers

- Transparency in the Recruitment Process

Employers will be required to specify the salary level or salary range for the position in job advertisements. This measure is intended to provide candidates with clear information and to prevent any discriminatory practices. Furthermore, asking for information about a candidate’s current salary or salary history will be prohibited.

- Access to Salary Information for Employees

Once employed, workers will have the right to request details about their own salary, as well as the average salaries for similar job categories, broken down by gender. Employers must provide this data within a maximum of two months from the request.

- Reporting Salary Discrepancies

Companies will be required to monitor and report salary differences between women and men. Organizations with more than 250 employees will submit annual reports starting in 2027, while those with 100–250 employees will report every three years. In cases where unjustified salary differences exceed 5%, employers will be obliged to initiate a joint evaluation process with employee representatives to address the issue.

- Elimination of Confidentiality Clauses

To enhance transparency, confidentiality clauses related to salaries will be prohibited. This means that employees will be able to disclose information about their own salary or the remuneration of colleagues in similar positions, thereby promoting equal pay.

The implementation of these measures will require companies to review their internal policies, including the criteria for evaluating and determining salaries, the training of human resources personnel, and the creation of effective communication mechanisms with employees. Additionally, many companies will turn to an employee benefits platform to efficiently manage their reward programs.

For Employees

The benefits brought by the new regulations are significant:

- Clear and Accessible Information:

Employees will gain a transparent view of the salary structure, learning both about their own remuneration and the average salaries within the organization, broken down by gender. These changes offer numerous employee benefits, ensuring a fairer working environment.

- Protection Against Discrimination:

If employees suspect the existence of unjustified salary differences, they will be able to take legal action to request financial compensation—including overdue salaries, interest, and moral damages. At the same time, employers will have to prove the absence of discrimination, thereby increasing the level of protection for workers.

In addition to these direct advantages, the new measures will also encourage the introduction of extra-salary benefits. For example, advantages of providing meal vouchers represent a valuable tool in the rewards package offered to employees, contributing to increased satisfaction and productivity.

Examples from Other EU Member States

EU member states such as France, Germany, and Spain have already implemented advanced mechanisms for salary transparency:

- France penalizes companies that do not adhere to gender equality standards.

- Germany allows employees to request information regarding their colleagues’ salaries.

- Spain requires detailed disclosure of salaries broken down by gender.

These examples represent best practices that Hungary intends to adopt in order to align its private sector with European standards.

A Major Impact on the Business Environment

The elimination of confidentiality clauses and the obligation to openly communicate remuneration will contribute to creating a more transparent business environment and strengthening trust between employers and employees. The new regulations impose clearly defined responsibilities regarding the administration and communication of salary information.

Conclusion

The new rules on salary transparency mark a fundamental change in labor relations in Hungary. By promoting open communication and eliminating salary discrimination, employees will benefit from a fairer and more informative environment, while companies will be responsible for adapting their policies to ensure compliance with the new European standards. This transformation, inspired by best practices from other member states, promises to contribute to a more just and competitive economic and social climate—offering significant benefits not only in terms of employee benefits but also through incentives such as extra-salary benefits and advantages of providing meal vouchers.