ERR reported on Thursday morning that the government intends to postpone transposing the legislation into law and have it redrafted.

Minister of Economic Affairs and Industry Erkki Keldo (Reform) said the government would rather pay a fine than increase the administrative burden on entrepreneurs. He should the free market should determine salaries.

Tsahkna said he commends Keldo and the whole government for expressing such clear opposition to the European Union's pay transparency directive.

"This is truly one of those very concrete cases where we have to say that what comes from Brussels does not suit us. It is very clearly an ideological and overregulating directive with rigid rules and bans which, I am sure, may not at all lead to the result that is being talked about, but may instead stifle entrepreneurship," Tsahkna told the governent's weekly press conference on Thursday.

He said the directive was part of the election campaign for European Socialists.

"Let us be honest, this was also part of the Europe-wide campaign for the European Parliament elections. So I think that the Estonian government definitely must not go along with this campaign," he added.

"I know that the Estonian Social Democrats are now also making a fuss about this issue, but what is important to us is that our society should not be overregulated, that our society should not be governed through rigid rules and bans, that we should have freedom of enterprise and people's freedom, but at the same time we must raise awareness, stand up for the weaker side as well and that is certainly what we intend to do," the minister said.

Tsahkna added that Estonia is not the only country in the European Union opposing the transposition of the directive.

"As far as I know, Sweden too, which has been something of a benchmark for us in how everyone is treated equally, is not satisfied with this directive," he said.

The deadline for transposing the directive is 7 June this year and Estonia may be fined if it does not do so.

SDE: Reform is retreating from European values

Social Democratic Party Chairman Lauri Läänemets said the Reform Party is retreating from European values with big steps.

"In Estonia, the gender pay gap is still among the largest in Europe. This means that women receive lower pay than men in similar positions. This means a smaller pension, smaller sickness benefits and so on in the future. But because women in Estonia often have a greater role in caring for children, women's lower sense of security also reduces the birth rate," he said.

"It is also a remarkable change that the Reform Party would rather waste taxpayers' money on paying fines than stand up for more equal opportunities for women," he added.

Läänemets predicted that the retreat from liberal values will lead to Reform losing support in the next elections in spring 2027.

"But when forming a new government, the Social Democrats need a broader choice than mainly conservative parties to form a government," he noted.

What is the EU's Pay Transparency Directive?

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 and well above the 11.1 percent average.

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