I. Objective and Systemic Approach of the Directive

One of the most important features of the regulation is that it is not merely declarative in nature, but establishes a directly enforceable system of substantive and procedural legal instruments. The focus is on the effective enforcement of the principle of “equal pay for equal work,” with particular regard to reducing gender pay disparities.

The legislator proceeds from the premise that pay discrimination is typically a hidden phenomenon; therefore, it introduces three interrelated mechanisms:

• ex ante transparency in recruitment and pay-setting processes,
• continuous monitoring (particularly for larger employers),
• ex post enforceability, supported by strong procedural safeguards.

This effectively introduces a compliance-based approach into labour law, which—beyond traditional individual disputes—requires organisational-level compliance.

Main objectives:

• effective enforcement of equal pay for equal work or work of equal value,
• reduction of the gender pay gap,
• increasing transparency of remuneration systems,
• removal of obstacles to enforcement (lack of information, evidentiary difficulties, fear of retaliation).

II. Conceptual Framework and Substantive Law Foundations

A key element of the Directive is the explicitly broad interpretation of the concept of “pay.” It includes not only base salary, but all forms of remuneration linked to the employment relationship, in particular:

• wage supplements,
• bonuses and rewards,
• benefits in kind,
• any monetary or non-monetary consideration.

In practice, this means that it is not sufficient to compare base salaries alone; the entire compensation structure must be assessed.

The definitions of “equal work” and “work of equal value” are also of central importance. Comparability must be ensured on the basis of objective, gender-neutral criteria, in particular:

• required skills,
• effort associated with the work,
• level of responsibility,
• working conditions.

Member States—including Hungary—will be required to provide a methodological framework to facilitate the identification of work of equal value. In practice, this may necessitate the introduction or review of job evaluation systems and frameworks.

III. Recruitment and Selection – Ex Ante Pay Transparency

One of the most visible changes concerns the recruitment process. In the future, applicants will be entitled to receive information about the remuneration for a position before applying, in at least one of the following forms:

• a specific starting base salary, or
• a predetermined salary range (with minimum–maximum values).

At the same time, the employer:

• may not inquire about the candidate’s previous salary,
• and may not use such information in determining pay.

Gender neutrality is also required in job advertisements and job titles. The clear aim of this regulation is to eliminate the phenomenon of “pay history perpetuation,” i.e. preventing previously set—potentially discriminatory—salary levels from carrying forward.

IV. Internal Pay Transparency and Employee Rights

During the employment relationship, employees are granted an explicit right to request information on pay conditions. This includes:

• data relating to their own pay, and
• the average pay levels, disaggregated by gender, of employees performing the same or work of equal value.

Employers are required to respond to such requests within a maximum of two months, in a clear, comprehensible, and verifiable manner.

An important change is that the traditional concept of “pay secrecy” becomes significantly restricted: employers may not prohibit employees from sharing pay information with each other, nor may any direct or indirect disadvantage be imposed for doing so.

V. Pay-Setting and Career Progression Systems

The regulation goes beyond individual rights and also imposes structural requirements. Employers must ensure that decisions regarding pay, pay increases, and promotions are based on:

• predefined,
• transparent,
• objective,
• and gender-neutral criteria.

In practice, this entails a comprehensive review of HR policies, internal regulations, and evaluation systems, particularly for medium-sized and large enterprises.

VI. Pay Reporting Obligations and the “5% Rule”

For larger employers, the Directive introduces a mandatory reporting system. Where the workforce exceeds 100 employees, regular reporting is required, including on:

• the gender pay gap;
• the proportion of female and male employees across pay quartiles;
• the gender pay gap by categories of employees, broken down by base salary and by complementary or variable components.

Of particular importance is the so-called 5% threshold: if the gender pay gap exceeds this level and cannot be justified by objective, gender-neutral reasons, the employer must conduct a joint pay assessment together with employee representatives. This constitutes not merely a reporting obligation, but an active corrective duty.

VII. Enforcement and Procedural Safeguards

One of the strongest elements of the Directive is the facilitation of enforcement. In this context:

• the burden of proof is reversed: it is not the employee who must prove discrimination, but the employer who must demonstrate that the pay difference is objective and lawful;
• employees are entitled to full compensation, covering unpaid wages, bonuses, benefits, and interest, without any upper limit;
• a strict prohibition of retaliation applies in relation to any enforcement action.

These rules are expected to significantly increase employer risks, particularly in litigation.

VIII. Scope, Transposition, and Relevance for Hungary

The Directive entered into force on 6 June 2023, with a final transposition deadline for Member States of 7 June 2026. Based on current information, Hungarian legislation is still in the preparatory phase; however, it is already clear that several areas of law will be affected, in particular:

• the Labour Code (rules on remuneration, information obligations, burden of proof),
• the procedural framework of the requirement of equal treatment,
• as well as employer HR and compliance practices.

Overall, this is not a narrowly defined amendment to labour law, but a comprehensive regulatory change that redefines the entire logic and documentation of pay-setting, while simultaneously significantly strengthening employee rights and increasing employers’ legal exposure.

In today’s modern legal environment, the documented and professional examination of digital evidence, as well as the protection of devices and user accounts, has become increasingly important in legal disputes and proceedings.

Our firm’s cooperating partner in this field is Biztonság Akadémia Kft.

The professional expertise of our partner is provided by Tamás Durmics, an independent IT security expert and ethical hacker with more than 25 years of experience in information technology and security. His work focuses on documented and independent examination methodologies, as well as on presenting technical findings in a clear and comprehensible manner suitable for use in legal proceedings.

One of the most common situations giving rise to the greatest number of conflicts during probate proceedings is when the deceased dies without making a testamentary disposition. In such cases, the fate of the assets and debts is determined by the statutory order of succession under the Hungarian Civil Code. Although the rules are clear, a significant proportion of clients are not aware of the more important changes introduced by the Civil Code currently in force, particularly with regard to the rights of the surviving spouse or the extent of the compulsory share.

Under the rules currently in force, the general rate of personal income tax (PIT) is 15 per cent of the tax base. In everyday language, many people lump the different concepts together and simply call every case in which no tax is deducted from their gross salary a “tax exemption.” From a legal-dogmatic perspective, however, classical tax exemption must be sharply distinguished from tax allowances. While tax-exempt revenues do not form part of the tax base in the first place, the tax system also recognises different rules that result in a reduction of the private individual’s tax: these are tax allowances reducing the consolidated tax base.

A particular characteristic of personal income tax is that these tax allowances and tax exemptions may be claimed only against income falling within the consolidated tax base and the tax thereon, and exclusively up to that amount.

Regulation (EU) 2024/1689 of the European Parliament and of the Council laying down harmonised rules on artificial intelligence represents a landmark step in reconciling innovation with the protection of fundamental rights in the digital sphere. The Regulation’s primary objective is to improve the functioning of the internal market and to promote the uptake of human-centric and trustworthy artificial intelligence (AI) within the European Union. At the same time, the Regulation attaches particular importance to ensuring a high level of protection of health, safety and fundamental rights—including democracy, the rule of law and environmental protection—against the potentially harmful effects of AI systems.

When enforcing overdue monetary claims, the time and cost involved in court litigation often act as a deterrent for the claimant. However, the Hungarian legal system provides a faster alternative that dispenses with the taking of evidence, known as the order for payment procedure (FMH).

This substitute for litigation, a simplified civil non-contentious procedure, is one of the most effective legal tools for enforcing claims, provided that the obligor does not contest the debt on the merits.