Don't let pay transparency requirements catch you by surprise in 2025

Pay transparency is about to be a hot-button topic for HR and compliance teams across the globe, and employers will need to educate themselves to stay out of legal hot water.

As of 2025, there are pay gap reporting requirements across 43 countries and 48 jurisdictions, including the EU's pay transparency directive, which will go into effect in 2027. This doesn't completely include the 14 states with pay transparency laws in the U.S., four of which go into effect this year. Every requirement looks a little different, but at the core, these laws are in place to increase awareness of pay discrepancies and close stubborn gender pay gaps. Given that the U.S. pay gap has only decreased by two cents in over 20 years (it sits at 82 cents for every man's dollar), it's clear that pay transparency legislation has its work cut out, and so do employers.   

"The number of either brand new or modified reporting requirements is set to double by 2027," says Christine Hendrickson, VP of strategic initiatives at Syndio, a global pay solutions company. "Where do you have reporting obligations? What are the [employer] size thresholds? When do you have to report? There's no one-size-fits-all answer. Our goal is to provide employers with a bit of a roadmap."

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Syndio launched the Pay Gap Reporting Hub, a resource for multinational companies navigating the evolving pay reporting landscape. U.S. employers with a global workforce can find which countries and states have reporting obligations and if they will be impacted and when.

For example, Japan's amended Act on the Promotion of Female Participation and Career Advancement in the Workplace requires employers with between 101 and 300 employees to analyze and create action plans around gender metrics in the workplace, like the proportion of women in the workforce and the percentage of women in managerial roles. Employers with over 300 employees will also need to submit wage differences between men and women. 

On the other hand, the EU requires companies with over 100 employees to identify and rectify pay gaps above 5% if said gaps cannot be justified. According to Eurostat, the statistical office of the EU, women earn 13 cents less than men per hour.

"We're counting down the days until the directive has to be transposed," says Hendrickson. "It is by far the most significant of pay equity legislation that has been enacted anywhere in the world since the 1960s. We've not seen anything at this scope and scale." 

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While the U.S. will not likely see national pay gap reporting legislation under the Trump administration, Hendrickson is confident states will adopt laws and strengthen existing ones. A third of the U.S. workforce is already impacted by pay transparency legislation. The challenge for employers with workers in the U.S. will be keeping up with inconsistent requirements throughout the same country. 

For instance, California mandates that employers submit an annual report on their payroll data, and another report must be submitted for workers hired through labor contractors. In Illinois, businesses were required to apply for an Equal Pay Registration Certificate by March of last year. Once they are certified, they then proceed to report their wage data every two years. 

"Less significant action at the federal level often results in more action at the state level," notes Hendrickson. "And that was very much the case with the first Trump administration, which was when we saw that wave of pay transparency laws that continue to this day." 

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Hendrickson encourages employers to assess where they have reporting requirements and those deadlines. Then, they need to decide how to approach it.

"For a long time, reporting was often done in a decentralized way, where the team in France handled reporting in France and the team in Australia handled reporting in Australia," she says. "But with more reporting, you have to determine if it makes sense to centralize the process."

A centralized approach may be easier for companies navigating requirements in several countries, states and cities — meaning one team is working to meet mandates on behalf of their global workforce. However, if your workforce is cut between the U.S. and Australia, it may be more efficient to have the Australian team handle it. Either way, employers should not expect to handle these laws alone. 

"Partner with your total rewards and legal team on this," says Hendrickson. "The stakes have never been higher, and the complexity is just exponentially growing."