Malta’s next HR challenge: Preparing for the EU’s new Pay Transparency Directive

Malta’s business leaders have another big task ahead. By June 2026, every company must follow the new EU Pay Transparency Directive. This marks a major shift for HR teams and company leaders alike. The main aim is to make sure pay decisions are fair, open, and easy to track for every employee.

What does the directive require?

The new EU law asks employers to prove that pay and rewards are set using clear and fair rules. Companies can’t rely on informal agreements or negotiations. There must be a clear process for setting pay, giving raises, and awarding bonuses.

Each company must be able to explain how job roles are set, how pay levels are decided, and what standards are used for promotions or salary increases. The law also aims to close gender pay gaps and ensure employees doing similar work get equal treatment.

For Malta, this means updating old HR systems and moving away from paper records or spreadsheets. It also means making sure every pay-related decision is easy to explain and back up. If a company cannot show why a decision was made, it could face complaints, legal problems, or fines.

Why manual processes will not be enough

Many companies still use manual pay reviews, annual spreadsheets, or informal meetings. These older methods make it hard to keep track of decisions.

With the new directive, HR teams will need to keep up-to-date records for each role and every pay decision. They need to show that their process is fair and that similar jobs get similar pay. The new rules also expect companies to share pay information with employees, making the process more open and clear.

How digital HR tools can help

The easiest way to manage these new requirements is with digital HR software. A platform like Talexio helps companies set up pay structures, track salary changes, and keep all records in one place.

“The EU Pay Transparency Directive is making us rethink pay and people management. We can no longer rely on informal records and manual processes. Digitising HR gives us control, visibility over pay practices and builds trust with our teams. I encourage every business in Malta to start this journey now, not later.” – Jonathan Camilleri, Head of HR, KonnektTalexio.

Using HR tools makes it possible to create job roles with clear pay bands. Every raise, bonus, or promotion is recorded in the system. Pay audits can be run at any time to spot gaps or problems. Employees can view their own records and see the standards used for pay decisions. Reports are easy to prepare for audits or regulatory checks.

All data is kept safe and is easy to find when needed. Reminders and workflows can help make sure reviews and updates happen on time. This saves time for HR and reduces the risk of missing important steps.

Next steps for business leaders

Business leaders should start by reviewing how their current pay and HR systems work. It helps to map out how salaries are set and kept on record. Clear standards are required and records need to be complete.

Next, look for areas that need improvement. Are some decisions not documented? Are pay bands missing for some jobs? Is it hard to explain how pay levels are set? If the answer to any of these questions is yes, moving to a digital HR platform is a good idea.

A simple way to start is with a pilot test. Try the new software with one team. Make sure everyone knows the process and where to find information. Once it works well, expand it to the rest of the company.

With the right digital tools, meeting the new standards of the EU Pay Transparency Directive is easier and more reliable. Leaders who act early will be ready for 2026 and build more trust with their teams.