Pay Transparency: How to Document Pay Decisions to Avoid Losing in Court

02.07.2026

Matylda is the Head of HR at a large manufacturing company.

One day, Agnieszka – a newly promoted Quality Control Manager – walked into her office. She was visibly upset from the moment she entered. Without any small talk, she got straight to the point:

“I’d like to discuss my salary.”

It soon became clear that during a team lunch, Jacek, the Technical Manager, had casually remarked that, for Agnieszka’s salary, “he wouldn’t even bother getting out of bed in the morning.” Surprised, Agnieszka asked him how he knew what she earned. He replied nonchalantly:

“I know how much all of you women earn around here. You have no idea how much it pays to be a man.”

Matylda listened carefully to Agnieszka’s account. She promised to review the relevant records and come back to her with an answer.

As soon as Agnieszka left the office, Matylda opened the HR system. She quickly established that Jacek’s salary was indeed significantly higher than that of the company’s other department managers. She also could not help noticing that virtually everyone else in comparable managerial positions was a woman.

Matylda tried to reconstruct the history of Jacek’s remuneration from his personnel file. Letter of intent, employment contract, amendments… Nothing explained such a substantial difference in pay.

To make matters worse, the manager who had made the decision to hire Jacek had long since left the company.

Feeling powerless, Matylda reflected on the situation and decided to… sweep the matter under the carpet.

“Agnieszka has probably calmed down by now,” she thought. “She’ll forget about it in a few days. And even if she doesn’t, perhaps it’s better that I have nothing to tell her. Surely she won’t take the company to court empty-handed…”

Several months later, Agnieszka filed a claim against the company alleging pay discrimination.

Can Matylda really sleep soundly?

The New Pay Transparency Rules – What Are They Really About?

Pay transparency has become an increasingly prominent topic.

For many people, the issue is primarily associated with last year’s amendments to employment law. They immediately think of mandatory salary ranges in job advertisements, the use of gender-inclusive job titles, or the prohibition on asking candidates about their previous earnings. While those changes are indeed already in force, they represent only one step towards greater transparency in the labour market and the reduction of unjustified pay disparities between women and men.

The driving force behind these developments is the Pay Transparency Directive. It establishes the framework for broader systemic reforms that are gradually extending to additional aspects of the employment relationship.

Although the changes introduced so far have already caused considerable disruption for many employers, the greatest challenge still lies ahead.

A draft bill introducing a further package of obligations for all Polish employers has now been published. In practice, once these new provisions enter into force, employers will be required to operate in an environment of significantly greater transparency regarding employees’ remuneration.

Although this next stage of the transparency framework is expected to take effect at the beginning of next year, employers would be well advised to begin preparing now.

The new obligations go far beyond updating a few documents or internal procedures. In many organisations, they will require a comprehensive review of the entire remuneration system, detailed analysis of pay data, and the implementation of structured and well-documented remuneration processes.

One thing is certain – the changes are unavoidable. Employers should therefore make full use of the time remaining before the new rules come into force. The better the preparation, the lower the risk of costly mistakes.

What Will the New Regulations Change?

In short: the rules of the game.

Once the new legislation enters into force, employees will have genuine tools to verify whether their remuneration is fair.

The new regulations will impose several significant new obligations on employers.

First, job evaluation

Companies will be required to clearly determine which employees perform work of equal value to the organisation. This assessment will take into account factors such as the qualifications required for the role, the scope of responsibility, the degree of autonomy, and the competencies necessary to perform the duties associated with a particular position.

Second, clear remuneration criteria

Companies will be required to establish transparent criteria governing remuneration, salary increases, and promotions, so that every employee understands why they receive a particular level of pay.

Third, transparency

Every employee will have the right to obtain information from the employer regarding their remuneration. They will also be entitled to see how their pay compares with that of employees performing work of equal value within the organisation, broken down by gender.

Moreover, employers will be required to regularly remind employees of their right to request this information.

Fourth, an end to pay secrecy

Employers will no longer be permitted to prohibit employees from discussing their remuneration with one another, whether by the coffee machine or elsewhere in the workplace.

Fifth, gender pay gap reporting

Larger employers will be required to periodically report data concerning pay differences between female and male employees.

Where those reports reveal significant and unjustified pay disparities, the organisation will be required to implement appropriate corrective measures.

A New Legal Risk: Who Will Have to Justify Their Position?

Now that we have examined the new obligations, let us return for a moment to Matylda’s story.

The Head of HR was convinced that if Agnieszka went to court “empty-handed,” the company had nothing to worry about.

Once the new rules take effect, however, that assumption may prove extremely costly.

Why?

Because although this aspect has received relatively little attention, it represents one of the most significant changes introduced by the new legislation. The new framework substantially strengthens the position of employees pursuing claims relating to unequal pay in comparison with their male counterparts.

Until now, the principle was relatively straightforward: if an employee believed she had been subjected to pay discrimination, she was required to establish at least a prima facie case before the court by demonstrating that her remuneration differed from that of comparable employees. In practice, this was often difficult, particularly where she had no access to the employer’s HR documentation.

The new rules fundamentally change that position.

If an employer fails to comply with its transparency obligations – for example, by failing to establish clear remuneration criteria, by not providing adequate information in response to an employee’s request, or by being unable to explain the reasons for differences in remuneration – it will be the employer who must satisfy the court that the employee has not been subjected to unlawful discrimination.

Accordingly, in a dispute with Agnieszka, the company would bear the burden of demonstrating that the difference between Jacek’s remuneration and hers was based on objective and legitimate factors. After several years, however, reconstructing the rationale behind that original pay decision may prove impossible. In practice, the absence of proper documentation may become a far greater problem for the employer than the pay disparity itself.

Losing such litigation can expose an organisation to substantial financial liability. Compensation awarded to an employee who successfully proves pay discrimination may be extensive. The employer may be required to pay full back pay reflecting the remuneration differential, compensate the employee for consequential financial losses (such as bonuses that would have been higher had the underlying salary not been lower), and even reimburse the value of non-cash employment benefits, including employee benefits in kind or the use of a company car.

How to Prepare for the Changes: A Practical Checklist

First, assess your current position

Conduct an HR audit of your remuneration practices.

Identify which roles within your organisation are comparable, review the remuneration of employees occupying those positions, and determine whether any existing pay differences can be justified by objective criteria.

This is the best opportunity to identify areas that may, in the future, give rise to employee questions or even legal disputes.

Second, review and organise your job descriptions and job evaluation framework

One of the cornerstones of the new legislation will be the ability to compare positions involving the same work or work of equal value.

For this reason, it is advisable to review and organise your job structure before the new regulations come into force.

Job descriptions should clearly define the scope of duties, level of responsibility, required qualifications, and competencies necessary to perform the role.

Only on this basis will it be possible to develop a robust job evaluation system and determine whether employees are genuinely in comparable positions.

Third, establish clear remuneration and promotion criteria

The greater the level of managerial discretion, the greater the legal risk.

This does not, of course, mean that all employees should receive identical remuneration.

Rather, every manager should clearly understand which circumstances justify a higher salary, a pay increase, or a promotion.

Where an organisation can clearly demonstrate these criteria, it will be considerably easier to establish that differences in remuneration are based on legitimate business reasons rather than unlawful discrimination.

Fourth, begin documenting key remuneration decisions now

A brief written record prepared at the time a decision is made may prove to be crucial evidence in court several years later.

Accordingly, employers should document more than recruitment decisions alone.

The same approach should apply to salary increases, promotions, discretionary bonuses, and any individually negotiated remuneration arrangements.

Fifth, prepare your HR team and managers

Managers are often the individuals who discuss remuneration with employees. They negotiate employment terms, recommend salary increases, and award bonuses.

They are also the people most likely to be asked why one employee earns more than another.

For that reason, the new legislation is not solely an HR challenge.

Managers should understand the importance of objective remuneration criteria and why every significant pay decision should be properly documented.

It is also advisable to establish, in advance, a formal procedure for handling employee requests for remuneration-related information.

This will enable the organisation to respond consistently and in accordance with established procedures when the first requests are received, rather than improvising under time pressure.

Summary

The new pay transparency legislation is not merely about increasing openness regarding remuneration. It also represents a significant change in the way litigation concerning pay discrimination between female and male employees will be conducted.

In the event of a dispute, the employer will be required to demonstrate that any difference in a female employee’s remuneration is based on objective and legitimate grounds rather than unlawful discrimination. The absence of appropriate documentation may prove to be a greater liability for the organisation than the pay disparity itself.

Employers should therefore use the time available before the new rules take effect to review their remuneration systems, job evaluation frameworks, and the criteria governing salary increases and promotions, ensuring that they are based on clear, transparent, and objective principles.

Proper documentation of remuneration decisions, together with appropriate training and preparation of managers and HR professionals, may ultimately determine whether an organisation is able to successfully defend its decisions before a court.