The directive aims to help enforce pay equality among employees and the EU expects Estonia to transpose the legislation into its laws by June 7, 2026. The amendments are under consideration in the Riigikogu.

Under the new rules, an employer must communicate the expected salary range before the first interview. Additionally, the employer can no longer ask a candidate to disclose their current salary.

If the average pay difference between men and women doing work of equal value is greater than 5 percent and cannot be justified objectively – for example, by experience or education – the company must carry out an analysis.

Larger companies must also create structured pay scales.

Data from Statistics Estonia shows that the hourly pay gap between men and women is 13.2 percent. However, in some sectors, it is over 20 percent. In 2024, the gender pay gap increased by 0.1 percentage points.

However, Eurostat puts the figure at 18.8 percent, the highest in the European Union.

Minister: Salary should be set by free market

Last week, the government discussed the transposition of the directive and decided to seek a postponement and amendment.

Minister of Economic Affairs and Industry Erkki Keldo (Reform) said the government wants to protect the competitiveness of Estonian businesses.

"For us, the fundamental problem is the way the directive envisages pay transparency – unfortunately, it increases the administrative burden on entrepreneurs," he explained.

The minister said the goal of making men's and women's pay levels as equal as possible has not been abandoned. However, he believes more emphasis should be placed on explanatory work among employers and employees.

Keldo argued that the free market and negotiations should set salaries.

"I do not think the state should prescribe every detail. A salary is agreed in negotiations – what level of pay a person is willing to come for and the employer is willing to hire them for," he said.

SDE: Government's arguement is not convincing

Karin Paulus, president of the women's association of the Social Democratic Party (SDE), does not believe the government's claims about increased administrative burden.

She said this is an argument about convenience, meant to please influential employer lobbying groups and secure party funding before elections.

"Anyone who knows even a little about using a computer today would not have much extra work because of this. In my opinion, this is a move away from Europe's shared values. We have been quite critical of Hungary, yet now we ourselves are taking the same backward-looking step," Paulus stressed.

Paulus points to a sore point: Estonia has one of the largest gender pay gaps in Europe. Additionally, the weakness of trade unions leaves employees in a very vulnerable position when facing employers.

She said the directive is "a gift to the weaker party," which would end a situation in which an employer benefits from an employee's lack of knowledge.

Paulus said SDE, feminist organisations and trade unions will continue to fight for the law and are prepared to protest.

What happens next and how large will the fine be?

One reason Estonia is delaying the transition of the directive is the hope that the new composition of the European Commission will be receptive to arguments about entrepreneurial freedom and competitiveness.

"I have already personally met with the relevant commissioner for labour, and I will also send him a letter," Keldo said, outlining his future steps.

He hopes to postpone the directive's entry into force by at least a couple of years.

Estonia is not alone in this struggle, as Sweden's governent has also expressed a similar view. However, Keldo acknowledged that, unlike in Estonia, gender issues are strictly written into domestic pay agreements in Sweden.

Keldo said the government is prepared to pay fines imposed by the European Commission rather than create new obligations for businesses that they say would cost millions of euros and thousands of working hours.

"If the situation really reaches the point of a fine, it is difficult to predict the amount, but it is certainly smaller than the cost that would arise from transposing the directive in its current form. It would mean enormous costs for the business sector through working hours and administrative burden," Keldo noted.

Equality commissioner bypassed

The Commissioner for Gender Equality and Equal Treatment, Christian Veske, is currently on holiday and could not be reached for comment.

Keldo said Veske had not been informed of the government's plans not to transpose the directive.

Paulus said bypassing Veske shows the government's attitude toward the issue: "It shows that these issues are no longer taken seriously. Perhaps it is even considered ridiculous that women think they could receive the same pay as men."

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