Pay transparency: a new compliance obligation with concrete data, deadlines and penalties

What the new Czech draft legislation brings

Directive (EU) 2023/970 was long seen as distant regulation. The new draft of its Czech implementation, however, changes the situation fundamentally – for the first time, companies can see the specific rules they will have to meet and the specific consequences if they don't. Pay transparency is moving from theory into the very practical domain of data, process and risk management.

It is a two-tier model. The state will automatically calculate the gender pay gap from data submitted through the single monthly employer report (JMHZ), in which companies provide detailed information on wages, benefits and employees. The employer then bears full responsibility for interpreting the results, preparing its own report on pay gaps within categories of workers and publishing it to employees. Responsibility for justifying pay therefore remains with the company.

The draft makes it clear that this will not be about reporting a single indicator. Companies will have to work systematically with their pay structure – define clear categories of workers (grades), introduce objective criteria and be able to explain pay differences at the level of individual roles. Without this structure, the new obligations cannot be met.

Key parameters to plan for

• 5% – the pay gap threshold within a category of workers that triggers mandatory corrective measures
• 6 months – the deadline for remedying the gap before a mandatory pay audit is required
• 2 months – the deadline for responding to an employee's request for information on their pay and a comparison with the average in their category by gender
• CZK 1,000,000 – the maximum fine for discrimination, the absence of a pay system or failure to meet audit-related obligations
• CZK 400,000 – the penalty for failing to publish the report or provide information

Where the real risk lies

The key change is not the calculation of the indicator itself. It is what comes after it. If the pay gap within a defined category of workers exceeds 5% and is not objectively justified, the employer must remedy the situation within six months. Without a remedy, a mandatory pay audit follows. Pay gaps thus cease to be mere information and become a regulatory trigger with clearly defined consequences.

On top of that comes a strengthening of employee rights. Every employee can request information on average pay in their category of workers by gender, and the employer must respond within two months. Companies without a clearly structured pay system with objective criteria and defined grades will not be able to answer such requests consistently – or to meet their reporting obligations.

In addition to financial penalties, legal risk is also growing: the reversed burden of proof and a higher likelihood of litigation mean that a company must be able to defend its pay at any time, not only at the moment of an inspection.

The biggest challenge is not calculating the gender pay gap. It is the company's ability to defend its pay – and to have high-quality, auditable data available to do so at any time.

How we approach it at Reporting.cz

At Reporting.cz, we build tailored industry solutions for our customers. Pay transparency is an example of an area where a generic reporting tool is not enough – a company needs a solution that understands the specific Czech methodology, connects existing HR data and produces outputs that hold up under inspection.

In line with our philosophy, we combine in-house consulting capacity with specialised partners. In the area of pay transparency, we work with GreenoMeter.com, whose platform Paygapmeter.com is designed specifically for gender pay gap calculations and reporting under Czech and European legislation. Thanks to the integration with Reporting.cz, customers do not have to enter data twice – they work in an environment they already know, and the outputs are directly auditable.

The result is a solution that covers the entire cycle: from structuring data and calculating indicators, through preparing the mandatory report, to supporting documentation in case of an inspection or an employee request.

What a CFO should do now

The legislation will apply and the deadlines will not be flexible. Companies that start preparing in time have an advantage – they can proceed methodically rather than under pressure. In practice, this means three things:

1. Map existing HR data and its quality – whether the company has all the necessary data in a structure that enables reporting under the new methodology.
2. Review the structure of the pay system – whether categories of workers and objective criteria are defined, and whether pay differences can be justified at the level of individual roles.
3. Set up processes for recurring reporting – so that meeting the obligations does not require manual rework and the company is ready for individual employee requests as well.

Companies that complete these steps in time will gain not only regulatory certainty but also better control over their pay system as a whole.

Prepare for the new obligations with expert help

We will be happy to show you how Reporting.cz, in cooperation with GreenoMeter.com, handles pay transparency in practice – from data structure to auditable output that holds up under inspection.

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