What SMEs need to know about the new Equal Pay Transparency rules

New rules on pay transparency have now come into force in Malta as part of the implementation of the EU’s Pay Transparency Directive.

The changes are intended to strengthen the principle of equal pay for equal work and to make it easier for employees and job applicants to understand how salary decisions are made. While some of the reporting obligations introduced in the regulations only apply to larger organisa ons, other changes will affect businesses of all sizes, including small and mediumsized enterprises. One of the most significant changes concerns recruitment. Employers must, from now on, provide job applicants with informa on about the salary or the salary range for a posi on before the recruitment process is concluded. This informa on may be included in vacancy adver sements or provided during the recruitment process to enable informed salary decisions.

Employers are now also prohibited from asking applicants about their current or previous salary history. The aim is to ensure that salary decisions are based on the requirements of the role and on objec ve criteria rather than on an individual’s previous earnings. Furthermore, employers are required to ensure that job vacancy no ces, job tles and recruitment processes are gender-neutral and free from discrimina on. The legisla on also offers employees greater transparency regarding salaries. Workers may request informa on about their own salary and how it compares, on average, with that of colleagues performing the same work or work of equal value, with the informa on provided being broken down by gender. Employers are also obliged to remind employees of this right on an annual basis and may not restrict workers from discussing or disclosing details of their own salary. Importantly, the regula ons do not require all employees performing the same role to receive iden cal salaries. Differences in salaries may s ll be jus fied where they are based on objec ve factors such as performance, competence, experience, qualifica ons, responsibili es or other legi mate business considera ons. The regula ons also introduce obliga ons regarding salary policies.

Employers are expected to maintain objec ve and gender-neutral criteria governing salary levels and salary progression. While employers with fewer than fi y employees benefit from certain exemp ons rela ng to formal salary progression policies, businesses employing twenty-five or more workers must s ll internally document the criteria used to determine salary and salary progression. The most widely publicised aspect of the new rules concerns gender pay gap repor ng, however, these obliga ons only apply to employers with at least one hundred employees. Employers with fewer than one hundred employees are not required to submit gender pay gap reports, although they may choose to do so voluntarily. For larger employers, repor ng obliga ons will apply on a phased basis depending on workforce size. In certain circumstances, employers may also be required to carry out a joint salary assessment where a significant and unjus fied gender pay gap is iden fied. As a prac cal first step, businesses should review their recruitment procedures, employment contracts and salary se ng prac ces and ensure that differences can be jus fied by objec ve criteria, that any restric ons on salary discussions are removed, and that appropriate records are maintained.

This article provides a general overview of the legislation and should not be regarded as legal advice.

The Malta Chamber of SMEs will be hosting a webinar on this subject on the 18th June 2026.

Legal experts will be available to explain in further detail and to answer questions. Click here to register.