The Swedish Government Calls for Renegotiation of the EU Pay Transparency Directive

Sweden has paused the implementation of the EU Pay Transparency Directive. The government is instead calling for the directive to be renegotiated and its entry into force postponed. The Confederation of Swedish Enterprise welcomes the decision.

The government writes that the directive, in its current form, would significantly increase the administrative burden on companies. This situation risks diverting time and resources away from the practical, long‑term work on gender equality that Swedish employers already carry out. The Confederation of Swedish Enterprise, which has worked extensively to highlight the challenges posed by the directive, shares this view.

– There is a high risk that the proposal creates an illusion of fairness rather than addressing the underlying problems. In the pursuit of regulating fair pay, there is an obvious risk that equality work becomes more formalised instead of more effective, says Camilla Gannvik, Wage Formation Specialist at the Confederation of Swedish Enterprise.

Limited National Flexibility

A key challenge with the directive is its limited flexibility for national solutions. Sweden has a long‑standing tradition of promoting equal pay, particularly through the pay formation process regulated by collective agreements.

For decades Swedish employers also have been subject to legal requirements to work proactively to prevent unjustified pay differences through regular pay surveys and analyses.

– It is essential that any new rules reinforce existing efforts in a constructive way, rather than simply adding new layers of regulation and increasing the compliance burden on companies, says Camilla Gannvik.

Challenges for Monthly-Based Salary Models

One key issue has been the EU’s proposal that salary calculations be based on hourly or annual pay. This is difficult to apply in Sweden, where wages are always set as monthly salaries. In the state-appointed inquiry into the implementation of the directive, a workable solution to this issue was presented.

However, that solution was unfortunately not included in the legislative proposal submitted by the government earlier this year. The Confederation of Swedish Enterprise expects this to be reflected in the further implementation process.

EU adopted the Pay Transparency Directive in spring 2023. Several countries, like Sweden, have since announced that they are postponing implementation and, in some cases, also called for the directive to be renegotiated.