EU Pay Transparency Directive 2023/970: Bulgaria guide

As the transposition deadline of 7 June 2026 approaches, Directive (EU) 2023/970 on pay transparency places unprecedented demands on employers across the European Union. Bulgaria has not yet adopted a specific bill to transpose it, but an inter-ministerial working group has already been set up, and the obligations will directly affect labour and anti-discrimination legislation.

This analysis looks at the key provisions of the Directive, compares them with current Bulgarian legislation, identifies the main gaps and outlines concrete steps for employers to prepare before June 2026. For practising lawyers and compliance specialists this topic is a priority, even though the national bill has not yet been tabled.

Directive (EU) 2023/970: legal framework and aims

The Directive was adopted on 10 May 2023 on the basis of Art. 157(3) of the Treaty on the Functioning of the European Union (TFEU) and builds on the principle of equal pay established in the earlier Directive 2006/54/EC on equal treatment. Its main aim is to close the pay gap between women and men (the gender pay gap) through pay transparency and effective enforcement mechanisms.

The context is clear: the average gender pay gap in the EU remains around 11.1% (Eurostat, 2024), and the pension gap reaches approximately 25%. Although Art. 157 TFEU has guaranteed the principle of equal pay since the founding of the EEC, the lack of effective transparency mechanisms has allowed the gap to persist. Directive 2023/970 is the most ambitious EU legislative act in this area.

Key provisions: what the Directive requires

The Directive introduces several categories of obligations that radically change how employers manage pay information. They cover the whole life cycle of the employment relationship, from applying for a job to existing employment contracts.

Of critical importance for practising lawyers is Art. 5(2), which expressly prohibits employers from asking candidates about their current or previous pay. This prohibition is unprecedented in European labour law and will require a substantial change in recruitment practices.

Reporting obligations by employer size

The Directive differentiates reporting obligations according to the number of employees and provides for different deadlines for the first report. Under Art. 9, employers must provide data on the pay gap between women and men, including basic pay, bonuses and benefits in kind.

Determining work of equal value: criteria and methodology

One of the most complex aspects of the Directive is determining when two kinds of work are of "equal value". Art. 4(4) sets out four objective, gender-neutral criteria that must be used in any job classification system.

It is essential that the comparison is not limited to one department or one workplace. Workers from different units, and even different locations of the same employer, can be compared with one another. The comparison is also not limited to overlapping periods of employment, which means that a current worker can be compared with a previous holder of the same position.

The case law of the CJEU (СЕС) in case C-170/84 Bilka-Kaufhaus (1986) established the basic test for objectively justifying differences in pay. In the more recent case C-381/99 Brunnhofer (2001) the CJEU added to the criteria for comparability of work for the purposes of equal pay. These judgments remain fundamental for interpreting the new Directive.

Joint pay assessment where the difference exceeds 5%

Art. 10 of the Directive introduces one of its most interventionist mechanisms: a mandatory joint pay assessment where the reported data show an unjustified difference of at least 5% between the average pay of women and men in any category of workers.

Penalties and compensation: reversal of the burden of proof

The Directive introduces a powerful enforcement mechanism, with the reversal of the burden of proof at its centre. Under Art. 18(2), where the employer has not complied with its transparency obligations, it is the employer who must prove that there was no pay discrimination, not the worker.

This provision is directly linked to the case law of the CJEU in C-427/11 Kenny (2013), which confirmed the standard of proof in equal pay cases. The Directive, however, goes further by automatically reversing the burden where transparency obligations are not met.

In addition, Art. 3(2), letter "д", for the first time in European legislation expressly covers intersectional discrimination: discrimination based on a combination of sex and another protected ground (race, ethnicity, disability, age and others). This is a significant novelty with potentially wide application.

Current Bulgarian legislation: gap analysis

The principle of equal pay formally exists in Bulgarian legislation, but the mechanisms for applying it differ substantially from the requirements of the Directive. The main provisions are in the Labour Code (КТ) and the Protection against Discrimination Act (ЗЗДискр).

Despite these provisions, there are significant gaps between current legislation and the requirements of the Directive. Art. 243 КТ declares the principle but provides neither transparency mechanisms nor reporting obligations. The ЗЗДискр prohibits discrimination, but it is a general act without specific instruments for pay.

Practical guide: preparing for June 2026

Despite the absence of a national bill, employers with 250+ employees and their legal advisers should start preparing immediately. The Directive has direct effect in respect of certain provisions, and delay in transposition does not remove liability. What follows is a practical action plan, split into three phases.

Pravko provides legal information but does not replace advice from a lawyer. For specific questions about applying Directive (EU) 2023/970 to your organisation, consult a licensed lawyer who specialises in labour law.