Danish bill to amend the Equal Pay Act

The bill has been sent for public consultation with a deadline of March 27, 2026. However, the called general election introduces uncertainty regarding the timeline and potential changes. We expect a final introduction of the bill with the listed key points, as the bill implements an EU directive, and the Ministry of Employment has discussed the implementation with the social partners.

The bill proposes an entry into force on January 1, 2027, even though the EU directive's original implementation deadline is June 7, 2026. As noted in the bill, this provides Danish companies with an opportunity to adapt and align with the new rules.

In this article, you will get an overview of what the bill contains, what it means for Danish companies, and how you can best prepare.

The Danish bill – in short

• The Danish bill is a minimum implementation of the EU Pay Transparency Directive (EU 2023/970) with pragmatic requirements for pay structures, pay reports for companies with 100+ employees, and applicants' right to pay information

• Companies with 50–99 employees are covered under certain conditions

• The obligation to conduct joint pay assessments is introduced when unjustified pay gaps exceed 5%

• A new national body, the Labour Market Institute for Equal Pay (AIFL), will be established for monitoring and advisory services

• The bill enters into force on January 1, 2027, approximately 6 months after the EU deadline

• The law is based on broad consensus among the social partners, preservation of the Danish model, and ensures freedom of method with a focus on effective implementation

• The legislative process may be temporarily delayed due to the general election on March 24, but is expected to resume quickly after a new government takes office

• The EU Commission is expected to show a pragmatic approach to minor delays, as long as active dialogue is maintained

What is the bill about?

The bill introduces a number of key obligations and rights:

• Applicants' right to pay information: In recruitment processes, applicants must be informed of the starting salary or salary range for the position they are applying for, and employers may not ask about the applicant's previous salary history. If the position is covered by a collective agreement, information on the agreement's pay provisions must be shared as part of the recruitment process. Freedom of method means that employers can, for example, share this information during the first job interview

• Employees' right to pay information: Employees can request information on their own salary level and average salary levels (basic salary and variable components) broken down by gender within their category of employees, and employers must respond in writing within two months. The information can also be provided by the employee representative or, under the draft bill, the new Labour Market Institute for Equal Pay.

• Reporting obligation for large companies: Companies with at least 100 employees must prepare pay reports with detailed gender-segregated data on pay gaps. For 50–99 employees, special thresholds apply under which the use of DISCO codes is suggested if there are at least 8 employees of each gender in a given category

• Joint pay assessment and follow-up: In the event of unjustified pay gaps of at least 5%, the company must, in cooperation with employee representatives, conduct a joint pay assessment and correct unjustified differences

• New monitoring body: The Labour Market Institute for Equal Pay (AIFL) is established as a national body for monitoring, advising, and handling pay-related issues

• Altered burden of proof rules: The bill proposes that the employer alone must prove that discrimination has not taken place if the employer has not complied with its obligations regarding, among other things, pay information, access to pay criteria, pay reports, or joint pay assessments. The exception to this is if the non-compliance with the obligation is obviously unintentional or of minor significance

• Special provision on limitation periods: Furthermore, the bill proposes that it should be possible to suspend the current limitation rules for up to 6 months if an employee brings a claim against the employer under the Equal Pay Act

• Sanctions for breaches and compensation: Employees or applicants can be awarded compensation for breaches of the Equal Pay Act. The bill proposes that, in the future, it should be possible to include as a factor in determining compensation whether the employer fails to comply with the new pay transparency obligations. Additionally, the employer can be fined under special circumstances.

When does the bill enter into force?

The bill enters into force on January 1, 2027 regarding employees' right to information

• Companies with 250+ employees: The first pay report for the calendar year 2027 must be submitted by September 1, 2028, at the latest, and annually thereafter

• Companies with 150–249 employees: The first pay report for the calendar year 2027 must be submitted by September 1, 2028, at the latest, and every three years thereafter

• Companies with 100–149 employees: The first pay report for the calendar year 2030 must be submitted by September 1, 2031, at the latest, and every three years thereafter

What should Danish companies do now?

• Map and document pay structure and job architecture: Establish clear employee categories based on objective, gender-neutral criteria. Consider whether categories defined by collective agreements should be used as a basis

• Ensure valid, gender-segregated pay data: Pay attention to data quality, governance, and anonymization. A pay policy and job catalog can be helpful resources to establish frameworks for pay determination, ensuring it is done in a fair and consistent manner

• Training of managers: Equip your managers to communicate about pay and handle inquiries to ensure compliance and transparency

• Communication to employees: Inform employees annually about their right to information and explain what the increased transparency means for them

• Establish processes for pay transparency: Develop process descriptions and annual cycles that support the requirements of the law

• Use AIFL as a resource: AIFL offers guidance and support in compliance and the management of pay-related issues.

How the Danish bill differs from the EU directive

Denmark has set the commencement date to January 1, 2027, approximately 6 months after the EU deadline of June 7, 2026

• Reporting for companies with 50–99 employees is included under conditions of a minimum of 8 employees of each gender in an employee category (based on DISCO codes)

• Denmark allows for its own classification systems in addition to DISCO codes, as DISCO codes alone are often deemed insufficient to meet the directive's requirements for comparing jobs of equal value

• The establishment of the Labour Market Institute for Equal Pay (AIFL) combines both monitoring and advisory functions into a single national body in Denmark

• Statistics Denmark and employer organizations will prepare pay reports on behalf of companies to reduce administrative burdens. However, it should be noted that this is based on existing reporting through DISCO codes, which in most cases will not be sufficient for comparing jobs of equal value

• The bill takes into account the Danish labor market model, including the role of the social partners and freedom of method in implementing the law

  
  

"The Danish bill is a pragmatic minimum implementation with broad support from social partners. It strengthens companies' opportunities to work systematically with equal pay, pay transparency, and increased trust in the workplace."

- Lucas Hong Cai, Co-Founder of Opacity

Concluding perspective

Companies should expect to establish job architecture and governance mechanisms to ensure systemization in pay determination, for example through job categories and pay policies. Depending on maturity levels, there may be a need for training of managers and communication to employees. Additionally, it is important to ensure data quality for reliable analysis and reporting.

Even though the law enters into force on January 01, 2027, giving companies an additional 6 months to prepare, it is recommended to get started now if your company is not already underway.

At Opacity, we have experience advising both small and large Danish companies in connection with the Pay Transparency Directive. Our projects range from smaller Danish companies operating solely at a national level that can achieve clarity with small, efficient initiatives, to large C25 companies operating across multiple EU countries. Regardless of the company's size or geographical reach, we have the expertise and a strong network of international colleagues who can support with advice also beyond Denmark's borders.

Please reach out if you would like to discuss how your company can best prepare for the Pay Transparency Directive.