Understanding the Gender Pay Gap: What Employers Need to Know

What is the gender pay gap?

The gender pay gap is the percentage difference in average gross hourly pay between women and men, measured before taxes and social security deductions.

It is more than just a statistic. The gender pay gap now affects how employees make decisions, shapes employer reputations, and can even create legal risks.

Types of the gender pay gap:

1. The unadjusted gender pay gap measures the overall earnings difference between women and men, without accounting for factors such as job position, experience, or sector. It provides a useful baseline.
2. The adjusted gender pay gap considers factors such as job level, tenure, and scope of responsibilities. This measure indicates whether pay differences are justified or require action.

Many companies still struggle to accurately calculate the gender pay gap and identify its underlying causes.

Gender Pay Gap in Poland and the European Union

Eurostat data shows that, on average, women in the EU earn 11,1%  less per hour than men. The size of the gap varies widely across countries. Estonia has the largest gap at 18,8%; Belgium has the smallest at 0,7%; and Luxembourg is the only EU country where the gap has been completely closed.

Poland’s gender pay gap is 4,0%, which is lower than the EU average. This is a positive sign, but it should not lead to complacency. Even with a smaller national gap, there can still be major inequalities within individual organisations.

It is also important to remember that a low national gender pay gap does not necessarily mean real equality. Sometimes, this lower gap happens because fewer women are working overall.

What drives the gender pay gap?

Differences in earnings are driven by several overlapping factors:

• Career breaks: women are more likely than men to take parental leave or reduce working hours. In the EU, 5.9% of women do so, compared to 2.5% of men (2018 data).
• Part-time work: In the EU, 28% of women and 8% of men work part-time, often due to caregiving responsibilities rather than personal preference.
• Leadership roles: Women remain underrepresented, comprising only 34% of managers in the EU and 44% in Poland.
• Sector concentration: Women are overrepresented in lower-paid sectors such as education, healthcare, and social work.
• In practice, the gender pay gap results from a combination of organisational decisions, labour market structures, and broader social dynamics.

EU Pay Transparency Directive – What It Means for Employers

EU Directive 2023/970 sets out several clear requirements for employers. The main aim is to reduce the gender pay gap and, more importantly, to make pay systems across the European Union more transparent.

In practice, employers will need to manage salary data more effectively, be more transparent with employees about pay, and be prepared to report pay differences regularly.

Here are the key changes:

1. Employers must share salary ranges in job postings or, at the latest, before interviews begin.
2. Employees can ask for details about their own pay, the salary range for their role, and the average pay for men and women in similar jobs.
3. Companies with over 250 employees must report every year. Those with 100 to 249 employees must report every three years. Smaller organisations are exempt but can choose to report if they want.
4. If an unjustified pay gap exceeds 5%, the company must work with employee representatives to review pay together.
5. Employment contracts cannot include rules that prohibit employees from discussing their pay.
6. If there is a dispute, the employer must prove that pay discrimination did not happen.
7. Employees who have faced pay inequality can claim compensation, including back pay with interest.

For employers, this is more than just reporting. They need to understand, explain, and back up pay decisions with data.

Why does acting now matter?

June 2026 will be here sooner than you think. Companies that begin analysing their pay data now will have more time to make changes in an organised and thoughtful way, instead of rushing at the last minute.

But regulation is only part of the story. A transparent pay strategy directly impacts:

• lower employee turnover and recruitment costs,
• stronger employer branding and more efficient talent acquisition,
• greater team engagement and motivation,
• lower legal risk from employee disputes,
• improved, data-driven HR decisions.

Levelly.ai is a platform for analysing, monitoring, and reporting the gender pay gap within organisations. It enables rapid identification of pay disparities, uncovers their root causes, and helps companies prepare for EU directive requirements in seconds, eliminating time-consuming manual work.