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Pay Equity Finland

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Basic Summary

Finland’s pay equity regime combines long-standing national equality obligations with new EU-wide transparency rules. Employers with at least 30 employees must prepare a gender equality plan that includes a pay survey comparing women’s and men’s remuneration by comparable job groups and analyzing reasons for differences. Employees can request information on pay levels and pay-setting criteria to assess suspected gender discrimination, and employers must cooperate with employee representatives when preparing pay surveys and remedies.

The EU Pay Transparency Directive (EU) 2023/970 adds binding disclosure, reporting, and remediation duties phased in between 2026 and 2031, including job-posting pay ranges, employee information rights, bans on pay secrecy, and mandatory public reporting for employers with 100+ employees. Unexplained gaps of at least 5% at the category-of-workers level trigger a joint pay assessment and corrective action.

Summary

Finland requires equal pay for the same or equal-value work and obliges employers regularly employing at least 30 employees to maintain a gender equality plan that includes a structured pay survey every one to two years (at least biennially). The survey must compare women’s and men’s pay by appropriate job groups, identify unjustified gaps, and set corrective measures with timelines. Preparation occurs in cooperation with employee representatives, and the plan must be made available to employees. Employees who suspect gender-based pay discrimination may obtain necessary pay information (their own level and comparable peers’ levels/components) from the employer to assess the claim.

Directive (EU) 2023/970 will require pre-hire pay transparency, prohibition of pay secrecy, expanded employee information rights, and periodic gender pay gap reporting to national authorities with public disclosure for employers with 100+ headcount. The Directive mandates joint pay assessments when an unexplained gender pay gap of at least 5% persists within a category of workers. Transposition is due by 7 June 2026; Finland’s implementing legislation is expected to align existing equality plan/pay survey obligations with the new EU transparency and reporting standards. Employers should already structure pay data, job evaluation, and analytics to EU specifications to ensure rapid compliance and defensible remediation.

  • Primary Finnish legislation
    • Act on Equality between Women and Men (609/1986, as amended) – mandates equal pay for the same or equal-value work, prohibits discrimination based on sex, gender identity and gender expression, and requires employers with at least 30 employees to prepare a gender equality plan including a pay survey at least every two years.
    • Non-Discrimination Act (1325/2014, as amended) – prohibits discrimination on additional protected grounds (e.g., age, origin, language, religion, belief, opinion, disability, sexual orientation); complements equal treatment in employment and compensation practices.
    • Act on the Protection of Privacy in Working Life (759/2004) – regulates collection and processing of employee personal data, including limitations on requesting data and conditions for processing for HR purposes.
    • Working Hours Act (872/2019) – defines working time, overtime and premium pay rules that affect remuneration components in analyses.
    • Annual Holidays Act (162/2005) – governs holiday pay; holiday bonus (lomaraha) is generally CBA/contractual rather than statutory but commonly paid and must be handled consistently in analyses.
    • Co-operation within Undertakings Act (1333/2021) – requires information, consultation, and co-operation with employee representatives; applies to equality plan preparation and remediation actions.
    • Data Protection Act (1050/2018) – implements GDPR in Finland, sets national specifics including processing of personal identity codes.
  • Regulatory and enforcement bodies
    • Ombudsman for Equality (Tasa-arvovaltuutettu) – supervises compliance with the Equality Act; may issue guidance, request information, and bring matters to the National Non-Discrimination and Equality Tribunal.
    • National Non-Discrimination and Equality Tribunal – may order corrective measures and impose conditional fines for non-compliance.
    • Regional Occupational Safety and Health (OSH) Authorities – monitor equality and non-discrimination obligations in workplaces together with the Ombudsman where relevant.
    • Office of the Data Protection Ombudsman – supervises compliance with GDPR and the Data Protection Act.
  • Penalties and remedies
    • Courts and the Tribunal can order cessation of discrimination and mandate corrective measures; conditional fines may be imposed for non-compliance with orders.
    • Individuals are entitled to compensation for discrimination; amounts are case-specific under Finnish law and may include back pay, damages, and default interest. The burden of proof can shift to the employer once a prima facie case is shown.
    • Employers may face administrative enforcement for failing to prepare an equality plan/pay survey or to provide employee-requested information.
  • EU framework
    • Directive (EU) 2023/970 on strengthening the application of the principle of equal pay between men and women through pay transparency and enforcement mechanisms (Pay Transparency Directive; adopted 10 May 2023; transposition by 7 June 2026).
    • Directive 2006/54/EC (recast) on equal opportunities and equal treatment of men and women in matters of employment and occupation.
    • Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation.
    • Directive (EU) 2019/1152 on transparent and predictable working conditions (supplementary transparency obligations).
  • Key EU Pay Transparency Directive elements relevant for Finland
    • Pre-employment transparency: provide pay range or initial pay level for job postings and ban asking candidates about pay history.
    • In-employment transparency: employees’ right to information on their individual pay and average pay levels broken down by sex for categories of workers performing the same or work of equal value; ban on pay secrecy clauses.
    • Reporting: employers with 250+ employees report by 7 June 2027 (annually thereafter); 150–249 by 7 June 2028 (every 3 years); 100–149 by 7 June 2031 (every 3 years). Publication and submission to competent authority/equality body.
    • Remediation: unexplained gaps of ≥5% within a category of workers that persist require a joint pay assessment with employee representatives, an action plan, timelines, and follow-up.

Detailed Data Requirements

Field/Data Description
Unique Employee ID Persistent internal identifier used for analytics; avoid using the Finnish personal identity code directly in analytic outputs; pseudonymize where possible.
Finnish Personal Identity Code (HETU) Process only where strictly necessary for payroll linkage; store encrypted; do not export to analytics files; lawful basis: legal obligation for payroll/tax; apply additional safeguards under the Data Protection Act.
Legal Sex (per HR/legal records) Male/Female as recorded in official registers; used for statutory gender pay analyses; note that gender identity and expression are protected, but special-category processing is restricted; do not infer or collect sensitive data beyond what is necessary.
Date of Birth / Age Needed for service awards or seniority calculations if used as objective, gender-neutral criteria; age must not be used in a discriminatory manner; store as year-of-birth or band where possible to minimize identifiability.
Nationality / Origin Generally exclude from pay equity models due to sensitivity and limited legal basis; may be used for non-discrimination monitoring only under strict GDPR conditions and DPIA.
Job Title Official HR title; normalize titles across business units; avoid using titles alone for comparisons—pair with job family/grade and job evaluation.
Job Family / Function Standardized job family taxonomy (e.g., Finance, Engineering, Sales) used for grouping and job evaluation.
Job Grade / Level Global or local grade/band used for job hierarchy; mandatory for category-of-workers formation; document grade architecture and criteria.
Job Evaluation Score / Level If a point-factor or analytical job evaluation is used, include the final score and level; crucial for equal value assessments.
Collective Agreement (CBA) Code Name/code of applicable sectoral or company-specific collective agreement and pay scale; include task requirement level per CBA where applicable.
Work Location City/municipality and region; indicate remote/hybrid status; use for geographic differentials when objective and documented.
Worksite/Entity Legal employer, business unit, and cost center; required for internal reporting and remediation accountability.
Employment Type Permanent/fixed-term; full-time/part-time; apprenticeship; trainee; temporary agency worker (note: agency workers are generally excluded from employer’s internal pay equity scope unless jointly employed).
Standard Weekly Hours Contracted hours (e.g., 37.5 or 40 per week); necessary for FTE normalization.
FTE Percentage FTE = contracted hours / full-time standard; use to standardize pay to 1.0 FTE for comparability.
Overtime Hours and Premiums Hours and pay premiums per Working Hours Act and CBA: daily overtime typically +50% for first two hours, +100% thereafter; weekly overtime and Sunday work per law/CBA; track separately from base pay.
Shift/Evening/Night/Sunday Allowances Fixed or variable allowances per law/CBA; capture separately for transparent component analysis.
Base Salary Contractual fixed pay (monthly for most employees); record effective date and pay frequency; store in EUR.
Annualized Base Salary Base salary converted to annual on a 12-month basis; exclude holiday bonus but include standard monthly holiday pay (monthly-paid employees receive base pay during holidays).
Variable Pay – Bonus Annual performance bonus target and actual paid; indicate plan type, performance period, and payout timing; accrue to performance period for analysis.
Variable Pay – Commission Sales incentive actuals by period; specify rate structure; normalize for seasonality where relevant.
Other Cash Allowances Tools, responsibility allowance, on-call allowance; itemize and identify recurring vs. one-off.
Holiday Pay and Holiday Accrual Basis Per Annual Holidays Act: monthly-paid employees receive regular salary; hourly-paid typically 9%/11.5% of earnings depending on service; document method used.
Holiday Bonus (Lomaraha) CBA/contractual, commonly 50% of holiday pay; not statutory but prevalent; include if paid; document rules.
Fringe Benefits (Taxable) Company car, phone, meal, accommodation, etc.; value per Finnish Tax Administration’s annual decision on fringe benefit valuation; include taxable value.
Employer Pension Contributions (above statutory) Supplemental pension contributions beyond statutory earnings-related pension; include cost to employer; document plan rules.
Equity Compensation RSUs/PSUs/options: grant date, vesting schedule, accounting expense (IFRS 2), and realized income if taxed as employment income; for pay equity, use an annualized fair value or accounting expense basis consistently.
Education and Qualifications Highest completed degree, licenses/certifications where job-related; only use as an objective, gender-neutral factor where relevant and validated.
Tenure and Relevant Experience Company service date; role tenure; externally verified years of relevant experience at hire (if documented and consistently applied).
Performance Rating / Contribution Measure Most recent calibrated rating and historical bands; include documentation on rating distribution and process; avoid using unvalidated or biased metrics.
Leave Status Parental, sick, unpaid, study leave; dates and FTE impact; ensure no adverse treatment in analysis contrary to equality law.
Hire Date / Rehire Date / Transfer Dates Track internal mobility affecting grade/role comparability and pay timing effects.
Termination Date For snapshot inclusion/exclusion; define a census date and rules for active vs. inactive employees.
Salary Range / Pay Scale Reference Applicable range midpoint, min, max at grade/role; needed for range penetration analyses and PTD disclosures.
Prior Salary History Do not collect or use in EU PTD context; PTD bans asking candidates about pay history; exclude from models and decisions.
Data Quality Flags Outlier flag, missing fields, unusual pay elements; used for cleansing and auditability.

Step-by-Step Calculation Methodology

  1. Data Standardization: Complete description of standardization procedures and requirements
    1. Establish a single valuation date (snapshot), e.g., 31 December of the fiscal year, with a 12-month lookback window for variable pay accruals. Convert all amounts to EUR and annualize pay frequencies as follows: monthly base x 12; weekly base x 52; hourly base x standard weekly hours x 52.
    2. Normalize fringe benefits using the Finnish Tax Administration’s annual fringe benefit valuation decision so taxable values are comparable across employees and time. For equity, select a single, documented basis (e.g., IFRS 2 annual accounting expense or grant-date fair value amortized over vesting) and apply consistently.
    3. Segregate pay components into analytical buckets for transparency: Base Salary; Regular Allowances (role/skill/responsibility allowances); Variable Incentives (bonus/commission); Overtime and Premiums; Fringe Benefits; Other Remuneration. Maintain component-level fields to allow inclusion/exclusion per metric definition (e.g., total remuneration vs. base pay analysis).
    4. Validate and cleanse: impute or exclude records with missing grade, sex, FTE, or base pay; flag outliers using interquartile range or robust z-scores for investigation; reconcile totals to payroll and Incomes Register reports for accuracy.
  2. FTE Adjustments: Detailed methodology for full-time equivalent calculations
    1. Compute FTE = contracted weekly hours / full-time standard hours at the employing entity (commonly 37.5 or 40). Document the chosen standard and apply it consistently.
    2. Standardize pay to 1.0 FTE for comparability: Standardized Base = (Actual Base) / FTE. For hourly staff: Standardized Base = Hourly Rate x Full-Time Standard Hours x 52. For variable pay targets expressed as % of base, recalculate using standardized base to avoid penalizing part-time status.
    3. Treat overtime and premiums separately from base comparisons. When analyzing total remuneration, include overtime but model it with working time variables (e.g., overtime hours, night/Sunday indicators) to avoid confounding with base pay equality.
  3. Total Compensation Calculations: Comprehensive formulas and calculation methods
    1. Define the principal metrics:
    2. Total Cash Compensation (TCC) = Standardized Base + Regular Allowances + Variable Incentives (accrued to performance period) + Overtime/Premiums.
    3. Total Remuneration (TR) = TCC + Taxable Fringe Benefits + Employer Supplemental Pension Contributions + Annualized Equity Expense.
    4. Base Pay (BP) = Standardized Base only (useful for equal pay for equal-value analysis focused on structural pay).
    5. Range Penetration = (Standardized Base – Range Minimum) / (Range Maximum – Range Minimum).
    6. Use medians and means: compute unadjusted gender gaps for each metric as Gap% = (Mean(Male) – Mean(Female)) / Mean(Male). Also compute medians to mitigate skew; report both per EU best practice.
  4. Comparison Group Formation: Methods for creating appropriate comparison groups
    1. Define categories of workers consistent with Directive (EU) 2023/970: groups of workers performing the same or work of equal value based on objective, gender-neutral criteria (skills, responsibility, effort, working conditions). Use a documented analytical job evaluation and/or CBA task requirement levels to align roles across titles and business units.
    2. Hierarchical grouping procedure:
    3. 1) Primary key: Job Grade/Level or CBA Task Requirement Level; 2) Secondary: Job Family/Function; 3) Tertiary: Work Location (if geographic differentials apply); 4) Distinguish Sales vs. Non-Sales due to commission structures.
    4. Minimum group sizes: for descriptive gaps, n≥5 per sex; for inferential testing or regression, n≥30 total with representation of both sexes; otherwise roll up to a higher-level category (e.g., job family-grade) or apply pooled models with fixed effects.
  5. Statistical Testing: Required statistical methods and thresholds
    1. Compute unadjusted gaps by category-of-workers and company-wide (mean and median). Apply two-sample t-tests for means and Mann–Whitney U for medians where distributions are skewed. Flag gaps ≥5% for PTD relevance and ≥2% for internal “practical significance” review.
    2. Run adjusted models to quantify unexplained gaps. Recommended model for Base Pay and TCC:
    3. ln(Pay_i) = β0 + β1·Female_i + β2·Tenure_i + β3·Grade FE + β4·Job Family FE + β5·Location FE + β6·Performance_i + β7·Full-time Status_i + ε_i
    4. Where FE denotes fixed effects. For TCC, add variables for overtime hours and eligibility, bonus plan eligibility, and sales status. Use robust (HC) standard errors, cluster by category-of-workers if appropriate. Interpret exp(β1)–1 as the percentage differential associated with being female.
    5. Thresholds: statistical significance at α=0.05 and practical significance thresholds (e.g., |exp(β1)–1| ≥ 0.02). For PTD-triggered actions, focus on unexplained gaps of ≥5% within a category-of-workers persisting without justification.
  6. Gap Analysis: Final analysis procedures and interpretation
    1. Produce a heatmap of unadjusted and adjusted gaps by category-of-workers, highlighting bands with: (a) unexplained gap ≥5% and significant; (b) 2–5% gaps; and (c) no material gap. Summarize headcount and total pay exposure in each band.
    2. For each flagged group, document objective, gender-neutral explanations supported by data (e.g., tenure mix, performance outcomes, geography). Where explanations are insufficient or not robust, designate remediation type: base pay adjustment, structural range update, allowance recalibration, or incentive plan redesign.
    3. For categories-of-workers with persistent ≥5% unexplained gaps, prepare for a joint pay assessment with employee representatives, define actions, resources, timelines, and monitoring per the Directive. Track follow-up and close gaps within the agreed schedule.

Justifiable Differences

  • Legally acceptable, objective, gender-neutral reasons for pay differences
    • Performance-based differentials tied to a documented, calibrated process with clear criteria, consistent application, and audit trails; distributions should be periodically reviewed for adverse impact.
    • Job-related qualifications and skills (education, certifications, licenses) that are demonstrably required or add measurable value to the role; ensure credentials are relevant and not proxies for gender.
    • Tenure and relevant experience that correlate with productivity or proficiency; use clearly defined measures (company service, role tenure, externally validated relevant experience at hire).
    • Job grade/level or CBA task requirement level reflecting evaluated job demands (skills, responsibility, effort, working conditions) using a gender-neutral job evaluation.
    • Geographic differentials based on documented cost-of-labor or labor market data; apply consistently to all employees in the location and reflect in salary structures.
    • Market scarcity premiums for specific skills, documented by up-to-date external benchmarks, with periodic review and sunset provisions.
    • Working time patterns linked to pay components that compensate time or inconvenience (overtime, night/evening/Sunday allowances) per law/CBA; ensure they are tied to actual hours/premiums rather than gender.
    • Shift/on-call/responsibility allowances when role requirements objectively warrant them and criteria are documented ex ante.
  • Employer documentation and burden of proof
    • Maintain contemporaneous documentation: job evaluation outcomes, salary structure and range controls, performance calibration records, market pricing sources, and pay decision justifications.
    • Under Finnish and EU rules, once an employee establishes a prima facie case of pay discrimination, the burden shifts to the employer to prove the pay difference is based on objective, gender-neutral factors.
  • Non-justifiable or high-risk reasons
    • Salary history or prior employer pay levels (PTD prohibits asking candidates about pay history).
    • Negotiation outcomes without structured ranges and approvals; ad hoc managerial discretion lacking documented, objective criteria.
    • “Retention” or “counter-offer” increases without market evidence or inconsistent application.
    • Different pay for the same or equal-value work based on parental leave, pregnancy, part-time status, or other protected grounds.
    • Title inflation/deflation or bespoke role naming to circumvent pay structures.
    • Averaging in or excluding allowances and benefits inconsistently by gender or group.

Reporting Requirements

  • Current Finnish obligations (Equality Act)
    • Employers with at least 30 employees must prepare a gender equality plan including a pay survey at least every two years. The plan describes employment equality measures, includes a pay survey comparing women’s and men’s pay by comparable groups, analyzes reasons for differences, and sets corrective measures and timelines.
    • The plan is prepared in cooperation with employee representatives (e.g., shop stewards/works council) under the Co-operation within Undertakings Act; it must be made available to employees (e.g., intranet, noticeboard) and presented upon request to the Ombudsman for Equality.
    • Upon an employee’s substantiated suspicion of gender-based pay discrimination, the employer must provide necessary pay information (pay level and its components) of a comparable employee to the requesting employee or their representative, to the extent needed to assess the claim. The employer should inform the data subject whose pay data is disclosed as required by privacy law.
  • EU Pay Transparency Directive (to be implemented by 7 June 2026)
    • Pre-hire transparency: disclose initial pay level or range in job postings or before interviews; do not ask candidates about pay history.
    • In-employment rights: provide employees, upon request and within a reasonable period, their individual pay level and average pay levels, broken down by sex, for categories of workers performing the same or work of equal value; prohibit pay secrecy clauses.
    • Employer-level reporting to competent authority and public disclosure for employers with:
    • 250+ employees: first report by 7 June 2027 (annually thereafter).
    • 150–249 employees: first report by 7 June 2028 (every 3 years).
    • 100–149 employees: first report by 7 June 2031 (every 3 years).
    • Content includes overall mean/median gender pay gaps (fixed and variable), gender pay gaps by category-of-workers, pay quartile distribution by sex, and proportion receiving variable pay; further detail per implementing act.
    • Joint pay assessment triggered when a category-of-workers shows an unexplained gender pay gap of at least 5% that persists; the assessment must set corrective actions, timelines, and monitoring, prepared jointly with employee representatives.
  • Submissions and publication
    • As of August 2025, Finland’s designated reporting portal/authority for PTD submissions has not been finalized. Monitor the Ministry of Social Affairs and Health and the Ombudsman for Equality for implementation guidance. Until then, maintain internal reports aligned to PTD templates and be ready for rapid submission/publication on corporate websites and to the designated authority.
  • Trade union/works council interactions
    • Provide equality plan drafts, pay survey outputs, and remediation proposals to employee representatives in the co-operation procedure; document minutes and agreements.
  • Internal reporting cadence
    • Quarterly internal dashboards on pay gaps by category-of-workers, with annual in-depth analytics feeding the biennial statutory pay survey and pending EU reports.

Example Employee Statement

Subject: Your Pay Information and Average Pay Levels for Comparable Work

Dear [Employee Name],

You currently hold the position of [Job Title], Job Grade [X], in [Location/Business Unit]. Your current base salary is EUR [Amount] per month (EUR [Amount] annualized at 1.0 FTE). In addition, you are eligible for the following pay components: [Bonus/Commission/Allowances/Fringe Benefits], governed by [Plan/CBA name].

In accordance with Finnish equality legislation and the EU pay transparency rules, we provide the following information for the category of workers performing the same or equal-value work as your role (Category: [defined category-of-workers]). For the most recent 12-month period ending [Date]:

  • Average base salary (female): EUR [Amount]; average base salary (male): EUR [Amount].
  • Median base salary (female): EUR [Amount]; median base salary (male): EUR [Amount].
  • Average total remuneration (female): EUR [Amount]; average total remuneration (male): EUR [Amount].

Pay in this category is determined using objective, gender-neutral criteria including job grade/job evaluation, relevant experience, performance outcomes, and market data. If you have questions about this information or would like further detail about the criteria used to determine pay in your category, please contact [HR Contact] or your employee representative. If you suspect your pay does not reflect equal pay for the same or equal-value work, you may raise the matter with HR, your representative, or the Ombudsman for Equality.

Kind regards,

[Employer/HR Representative]

Remediation Framework

  • Trigger and scope
    • Trigger remediation when an unexplained gender pay gap is identified by category-of-workers (priority: ≥5% and statistically significant; secondary: 2–5% with indications of structural bias).
    • Define scope by the relevant comparison group, census date, pay components to adjust (primarily base pay), and impacted headcount.
  • Investigation
    • Validate data quality (FTE, grade, allowances); confirm category-of-workers definitions; reassess model specification; review performance and market data for objective justifications.
    • Conduct file reviews for flagged individuals to ensure decisions were based on documented, gender-neutral criteria; check for systemic patterns (e.g., entry pay compression for women).
  • Corrective actions
    • Base pay adjustments to align similarly situated employees to appropriate range positions (e.g., target midpoint by tenure/performance bands); avoid reducing anyone’s pay; implement increases effective immediately or at next cycle.
    • Structural fixes: update salary ranges, harmonize allowances, recalibrate performance distributions, and revise starting pay guidelines to prevent recurrence.
    • Variable pay: adjust eligibility rules and target opportunities where inequitable access is identified (e.g., plan eligibility differences without objective basis).
  • Retroactive payments and interest
    • Where unlawful underpayment is established, pay the difference retroactively for the relevant period consistent with Finnish limitation and interest rules; report corrections to the Incomes Register and settle associated taxes and social contributions; apply statutory default interest per the Interest Act where applicable.
  • Joint pay assessment
    • For persistent ≥5% unexplained gaps by category-of-workers, perform a joint pay assessment with employee representatives per the EU Directive: include diagnosis, actions, timelines, responsible owners, resource allocations, and monitoring checkpoints. Share outcomes with employees and, where required, authorities.
  • Governance and monitoring
    • Establish a Pay Equity Committee (HR, Legal, Finance, Employee Representatives) to oversee remediation; track KPIs, document decisions, and audit outcomes at least semi-annually.
  • Appeals
    • Provide an employee appeal process for pay equity adjustments with clear timelines and an impartial review mechanism; document decisions and communicate outcomes.

Compliance Calendar

  • January–February
    • Annualize prior-year data; refresh job evaluation and salary structures; calibrate performance ratings.
  • March–April
    • Conduct pay equity analyses and finalize remediation proposals; prepare executive and co-operation body briefings.
  • May–June
    • Implement base pay adjustments; submit or publish PTD reports as applicable once national portal is designated; finalize joint pay assessments if triggered.
  • July–September
    • Audit variable pay outcomes (bonus/commission) for equity; adjust plan rules for the next cycle.
  • October–November
    • Draft/update the gender equality plan and pay survey (at least biennially); consult with employee representatives.
  • December
    • Approve the equality plan; update internal disclosures; prepare next-year job posting pay range library to comply with pre-hire transparency.
  • Biennial cadence
    • Ensure the equality plan with pay survey is fully updated at least every two years; align one of the annual analyses to feed the statutory plan cycle.
  • Directive milestones
    • 7 June 2026: Finland’s PTD transposition deadline.
    • 7 June 2027: First PTD reports due for 250+ employers (annually thereafter).
    • 7 June 2028: First PTD reports due for 150–249 employers (every 3 years).
    • 7 June 2031: First PTD reports due for 100–149 employers (every 3 years).

GDPR and Data Management

  • Lawful basis and purpose limitation – Processing employee pay data for equality plan/pay survey and PTD reporting rests on legal obligation (GDPR Art. 6(1)(c)) and/or legitimate interests (Art. 6(1)(f)) when conducting broader fairness analytics; restrict processing to the purpose of pay equity and transparency compliance; maintain a written purpose statement and data map.
  • Special category data – Avoid processing special categories (e.g., health, ethnicity, religion) for pay equity unless a clear legal basis and safeguards exist (Art. 9 GDPR); sex as recorded in HR systems is generally not special category but treat gender identity with heightened sensitivity and do not process unless strictly necessary and lawful.
  • Data minimization and pseudonymization – Use only fields necessary for defined analyses; replace direct identifiers (name, HETU) with pseudonymous IDs in analytics; maintain a separate key file with strict access controls.
  • Employee information rights – Provide transparent notices describing pay data processing, recipients, retention, and rights (access, rectification, objection, restriction); ensure timely responses to employee information requests mandated by national law and the PTD.
  • Security measures – Apply role-based access controls, encryption at rest and in transit, secure key management for HETU, audit logging, and least-privilege principles; vet vendors under data processing agreements with GDPR Article 28 clauses; conduct periodic security assessments.
  • Data Protection Impact Assessment (DPIA) – Perform a DPIA for large-scale systematic monitoring of employees’ pay and for PTD reporting processes; assess risks of re-identification in small groups and apply small-cell suppression or aggregation.
  • Cross-border transfers – Keep data within the EEA where possible; if transfer to third countries is necessary, use EU Standard Contractual Clauses and conduct a transfer impact assessment; ensure recipients provide essentially equivalent protection.
  • Retention and deletion – Define retention aligned to statutory obligations and limitation periods; retain equality plans/pay surveys and supporting datasets only as long as necessary to demonstrate compliance and defend claims, then securely delete or anonymize; align payroll source data retention with Accounting Act requirements (e.g., 6–10 years for accounting records) while limiting analytic extracts to shorter, defined periods.
  • Accountability and audit – Maintain records of processing (RoPA) for pay equity activities; document methodologies, data sources, and decisions; enable audits by the Ombudsman for Equality and the Data Protection Ombudsman if requested.

Useful Resources

Important Disclaimer: This guide is based on information available as of August 2025 and is subject to change. The content provided does not constitute legal advice and is for informational purposes only. Total Rewards professionals should seek qualified legal counsel and local employment law expertise before making decisions or taking actions based on this guidance. Laws and regulations vary by jurisdiction and can change frequently. Always consult with local legal experts and relevant government agencies for the most current requirements.

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