What every employer needs to know about Malta’s pay transparency law

The introduction of Malta's Equal Pay (Transparency and Reporting) Regulations, 2026 marks a significant shift in how employers approach remuneration, pay transparency and gender equality in the workplace. While the new rules transpose the EU Pay Transparency Directive into Maltese law, many employers still have practical questions about how the legislation will operate in practice and what obligations it creates.

To help employers better understand the new framework, MaltaCEOs.mt spoke to Dr Christine Calleja, Partner at Mamo TCV Advocates, answers some of the most common questions surrounding the regulations, from reporting obligations and equal value assessments to complaint procedures, performance-based pay and potential implementation challenges.

Dr Calleja advises employers and employees on a broad range of employment and human resources matters, including employment contracts, workplace policies, disciplinary procedures, terminations of employment, collective agreements, trade disputes and regulatory compliance. She regularly represents clients before the Industrial Tribunal and the Maltese courts in employment-related proceedings.

1. Who will be the competent authority in Malta for complaints under the Pay Transparency Directive? Will this be the NCPE, DIER, the Industrial Tribunal, or another body?

The Equal Pay (Transparency and Reporting) Regulations, 2026, which implement the Pay Transparency Directive in Malta, establish two principal bodies: the Equality Body, namely the National Commission for the Promotion of Equality ("NCPE"), and the Monitoring Body, namely the Department for Industrial and Employment Relations ("DIER"). The NCPE, as the Equality Body, supports employees in enforcing their rights under the Regulations, including assisting with information requests, advising on equal pay claims and, where appropriate, supporting or instituting legal proceedings. Where pay information could identify another employee, it may be disclosed to the NCPE, which can assess whether grounds for a claim exist. The DIER, as the Monitoring Body, oversees implementation of the pay transparency framework, monitors compliance, reviews pay gap reports, analyses and publishes gender pay gap data, raises awareness, and reports to the Maltese Government and the European Commission.

Therefore, there is no single authority responsible for all "complaints" under the Regulations. In case of a dispute which then leads to formal proceedings, another body will become involved, namely the Industrial Tribunal.

2. How will "work of equal value" be assessed in practice, particularly where employees have different job titles but perform substantially similar work?

Whether work is of equal value is not determined by job title but by an objective assessment of the work actually performed. The Regulations require employers to assess roles using gender-neutral criteria, namely skills, effort, responsibility and working conditions. Employers should therefore evaluate the actual work performed pertaining to each role and not simply rely on job descriptions or titles. In practice, many employers are likely to implement a job evaluation methodology or scoring framework to assess roles against these criteria and identify which roles should be grouped together as a "category of workers". Employees performing work of equal value may therefore fall within the same category even where their job titles differ considerably.

3. How will the directive apply to non-binary employees or employees whose gender identity falls outside the male/female categories recognised in the directive?

The Regulations do not currently establish a specific reporting or comparison mechanism for non-binary employees. Nevertheless, such employees would still be able to rely on the broader protections against discrimination available under Maltese and EU equality law. As matters stand, the main uncertainty relates not to whether protection exists, as this is certainly established, but rather to how non-binary employees will be reflected in employers' pay transparency reporting obligations and statistical analysis.

In practice, this may create challenges for employers when complying with the requirement to provide information on average pay levels and pay progression for categories of workers broken down by sex. Where a category of workers includes a non-binary employee, employers may need to consider whether an additional gender category should be reflected in the data or whether alternative reporting arrangements may be appropriate, although the Regulations do not currently provide express guidance on this point.

4. Will Malta extend mandatory pay reporting to employers with fewer than 100 employees, given the country's large SME sector?

At present, the Equal Pay (Transparency and Reporting) Regulations apply only to employers with 100 or more employees. There is currently no indication that Malta intends to extend mandatory pay reporting obligations to employers with fewer than 100 employees, although future legislative changes cannot be ruled out.

5. What practical steps should an employee in Malta take if they believe they are being paid less because of their gender?

An employee who believes that they are being paid less because of their gender should first seek information regarding their pay and how it compares with that of other employees performing the same work or work of equal value. It is worth noting that an employee may have a valid claim even if the comparator is of the same gender, since the Regulations are ultimately concerned with ensuring equal pay for equal work or work of equal value.

As a first step, the employee may request information regarding their individual pay level and the average pay level, broken down by sex, for the category of workers to which they belong. If the information suggests that they are paid less than comparable workers, the employee may ask the employer to explain the reasons for the difference.

A pay difference will not necessarily be unlawful. Employers may justify differences in pay on the basis of objective and gender-neutral criteria.

If the employer fails to provide the requested information, does not adequately explain the difference in pay, or if the employee believes that the job evaluation or categorisation exercise has been carried out incorrectly, the employee may seek assistance from the Equality Body or the employees’ representative, and/or institute proceedings before the Industrial Tribunal. In such proceedings, the employee may challenge not only the level of pay received, but also the category of workers in which they have been placed or the manner in which the employer assessed and evaluated the role.

6. How can employers demonstrate that performance-based pay differences are genuinely objective and free from gender bias?

Employers seeking to justify performance-based differences in pay should ensure that performance is assessed using objective, transparent and consistently applied criteria. Ideally, this would involve setting clear performance objectives or KPIs and conducting a documented performance appraisal against those targets. However, even where formal KPIs have not been established, employers should have a structured performance assessment process based on set criteria and supported by appropriate records. The key consideration is that pay differences must be based on genuine differences in performance and competence rather than assumptions or subjective judgments.

Where performance is assessed objectively and consistently, employers are entitled to differentiate pay between employees, even if the work being carried out is the same type of work. Documentation is essential. Even a fair assessment will be difficult to defend without proper written records.

7. Do discretionary bonuses, allowances and retention payments present a potential loophole, despite being included within the directive's definition of pay?

Discretionary bonuses, allowances and retention payments are all included within the definition of "pay" and must therefore be taken into account when calculating pay levels and providing employees with pay information. As a result, they can influence the average pay for a category of workers. Even before the introduction of the pay transparency regime, these differences in bonuses, allowances or other benefits between employees performing the same work or work of equal value, still had to be justified based on general principles of non-discrimination.

The main impact of the new regime is increased transparency. Because variable pay components are now reflected in the information disclosed to employees, employers must be able to explain and justify any differences in these payments using clear and objective criteria.

8. Which parts of the directive are likely to be the most challenging for Maltese employers to implement?

The most significant challenge for many Maltese employers will be moving towards a more structured and transparent pay framework, rather than relying heavily on market conditions and negotiation when setting pay.

Employers may also find it difficult to identify employees performing "work of equal value" and group them into the same category, particularly where job titles and responsibilities differ.

In addition, organisations may uncover historical pay differences that have developed over time but cannot be objectively justified. Where such differences are not based on gender-neutral criteria, employers may need to review and adjust their remuneration practices.

As businesses prepare for implementation, understanding both the legal requirements and their practical implications will be key to ensuring compliance and reducing the risk of disputes. Dr Calleja's insights provide employers with a practical overview of the issues they are most likely to encounter as Malta enters a new era of pay transparency.