By Sally Makreff
BLOG OVERVIEW: Estonia will delay full transposition of the EU Pay Transparency Directive until 2028, postponing mandatory gender pay gap reporting and seeking amendments to reduce administrative burden on employers. Estonia is still moving forward with core pay transparency provisions and will amend its Employment Contracts Act to reinforce equal pay for equal work. Employers operating in Estonia should comply with these immediate obligations and begin internal pay equity reviews to prepare for the gender pay gap reporting requirements still ahead.
On April 16, 2026, Estonia’s Minister of Economy and Industry announced that the country will delay its transposition of the European Union Pay Transparency Directive (the Directive), citing concerns over excessive administrative burdens placed on businesses and the impact on their competitiveness in the global market. Estonia joins other member states such as Sweden in seeking more time and flexibility to renegotiate certain elements of the directive. Estonia plans to move forward with select obligations from the Directive but is seeking to defer full implementation—including the gender pay gap reporting requirements—until 2028.
Requested Amendments
To ease administrative burden it claims the Directive will have on its employers, Estonia has requested several amendments aimed at reducing the complexity and bureaucracy of the Directive’s requirements. These requested amendments include:
- Postponing mandatory gender pay gap reporting until 2028 so that businesses have enough time to adapt to the new pay reporting requirements.
- Deferring the mandatory pay structures that are prescribed by the Directive for pay gap reporting since their formal standardized approach is incompatible with Estonia’s flexible wage-setting system that is market-driven and allows for pay negotiations between individuals and their employer.
- Reducing the number of mandatory reporting requirements and indicators, as well as creating a simpler definition of remuneration.
- Exempting small businesses from having to comply with the reporting requirements by raising the thresholds before reporting requirements apply.
- Permitting Estonia to use their current legal system for enforcement actions and remedies rather than the Directive’s required joint pay assessments that involve employee representatives.
While Estonia supports the Directive’s goal of gender pay equality, their proposed amendments demonstrate Estonia’s concern that the requirements of the Directive are too rigid, overly complicated, and administratively burdensome to businesses. Estonia is seeking more discretion in how pay equality objectives are achieved rather than following the prescribed process currently laid out.
Compliance with Pay Transparency Requirements
Although Estonia is requesting the above amendments, it is moving forward with incorporating the Directive’s pay transparency requirements into their employment laws. These requirements include:
- Disclosure of salary ranges of positions prior to job interviews
- Ban on questions related to previous salary of applicants during job interviews
- Protections for employees who discuss pay with other colleagues
In addition, Estonia will amend its Employment Contracts Act that more explicitly states that women and men must receive equal pay for equal work or work of equal value.
Potential Fines for Non-Compliance
Partial transposition of the Directive will not protect Estonia from potential European Union (EU) penalties for non-compliance. One type of enforcement for non-compliance with the Directive is a fine. However, any fines would only be imposed after a formal EU legal review. Estonia’s government has framed potential EU fines as preferable to complying with what it views as the Directive’s onerous requirements.
Next Steps
Although Estonia is delaying full implementation of the Directive as well as submitting amendments, there is a legal obligation for employers to comply with the elements that Estonia is moving forward with. In addition, companies should prepare for the requirements that will follow. This means compliance with the previously mentioned pay transparency requirements as well as conducting internal pay data reviews. These reviews should be used to identify unexplained gaps in pay so that issues can be addressed before the gender pay gap reporting is required. Completing these steps will allow companies to meet Estonia’s current requirements and be prepared for when pay reporting obligations take effect.
DCI will continue monitoring developments and provide updates as needed. Sign up to receive our monthly EU Pay Transparency Directive newsletter.
