Part 2: Objective, Gender-Neutral and Bias-Free through Pay Transparency

This is Part 2 of a four-part series on Malta’s Equal Pay (Transparency and Reporting) Regulations, 2026 (Legal Notice 173 of 2026). Part 1 examined the foundational framework, including the objectives, key definitions, and the substantive equal pay obligations introduced by Part I of the Regulations.

In this second instalment, we turn to Part II of the Regulations, entitled Pay Transparency, which establishes a series of concrete rights designed to ensure that pay-related information flows openly and fairly. The rights examined in this article are organised into two categories: (a) rights that apply to applicants prior to being employed, and (b) rights that accrue to workers during the course of their employment.

Pre-Employment Rights: Transparency Before Recruitment is Concluded

1. The Right to Information on Initial Pay

Article 4 of the Regulations establishes the first and perhaps most immediately impactful right under the pay transparency framework: the right of applicants for employment to receive information about the pay they can expect for the position they are applying for.

Notably, under Article 4(1)(a), applicants have the right to receive from the prospective employer information about the initial pay or its range, based on objective, gender-neutral criteria, to be attributed to the position concerned. The law does not require employers to disclose a fixed pay figure. The provision of a pay range is sufficient to satisfy the obligation. What matters is that the information provided, whether a fixed figure or a range, is grounded in objective and gender-neutral criteria. Employers cannot, for example, base a stated range on assumptions about the applicant’s gender, family situation, or salary expectations linked to gendered labour market trends.

Furthermore, where the employer is governed by a collective agreement, the applicant is also entitled to receive the relevant pay provisions of the collective agreement as applied by the employer in relation to the position being filled.

2. The Prohibition on Salary History Inquiries

Article 5 introduces a second critical pre-employment right: the prohibition on salary history inquiries. Employers are prohibited from asking applicants about their pay history, that is, how much they earned in their previous employment or in any prior role.

This prohibition serves a clear purpose. If employers were permitted to anchor new salary offers to an applicant’s previous earnings, any existing pay disparity, including one rooted in gender-based discrimination, would simply be carried forward into the new employment. The salary history ban breaks this cycle. It ensures that the starting point for pay negotiations is the value of the role and the criteria attached to it, not what the applicant happened to earn elsewhere.

Applicants are therefore under no obligation whatsoever to disclose their previous remuneration to a prospective employer, and employers must not seek or use such information in determining the pay to be offered.

3. Pay-Setting and Pay Progression Criteria

Article 7 imposes a further transparency obligation on employers.  Employers must prepare policies setting out the criteria used to determine workers’ pay, pay levels, and pay progression. These criteria must be objective, gender-neutral, and bias-free. Critically, these policies must be made accessible to workers at all times.

However, the Regulations introduce a tiered approach based on the size of the employer:

1. Employers with 50 or more employees are subject to the full obligation: they must establish the criteria and policies they use to determine workers’ pay, pay levels, and pay progression in writing, and these must be accessible to workers at all times.
2. Employers with fewer than 50 employees are exempt from the obligation relating to pay progression information specifically. However, they remain bound by the obligation to make accessible the criteria for determining pay and pay levels — the exemption applies only to the pay progression component.

• Employers with at least 25 employees are required to internally document, at employer (management) level, the criteria used to determine workers’ pay, pay levels, and pay progression. Although they may not be required to make the pay progression element accessible to workers (if they employ fewer than 50), they must still retain internal documentation explaining the full suite of criteria used, including pay progression.

Rights During Employment: Transparency for Workers on the Job

1. The Right to Information on Pay Levels

Article 6 establishes a substantive right for workers to request and receive information about their pay.

Workers have the right to request and receive information about their individual pay level and the average pay levels, broken down by sex, for categories of workers performing the same work or work of equal value. This right extends beyond simple pay comparisons within the same job title; it covers work of equal value, ensuring that the comparison captures roles that may differ in title but are comparable in substance.

A worker may submit a request for this information at any time. The employer must respond within a reasonable time. The Regulations also provide that where a worker makes such a request through their workers’ representatives, the information is to be provided accordingly.

Sub-article 5 of article 6 of the Regulations establishes that a contravention of the employer’s obligations under this article constitutes an offence under the Employment and Industrial Relations Act (Chapter 452 of the Laws of Malta). This means that an employer who fails to provide the required information, or who provides it in an incomplete or misleading manner, exposes itself to criminal liability. Breaching the provisions of the Regulations is ordinarily punishable by a fine of between €2,500 and €5,000. Higher fines of between €5,000 and €7,000 are imposed where the principle of equal pay for equal work or work of equal value is deemed to have been breached on the basis of gender and intersectional discrimination.

Employers are also required to inform workers annually of their right to request and receive this information. The Regulations also impose a mandatory data retention period of five (5) years for the records and information related to pay transparency.

2. The Single Source and Comparable Situations

Article 8 of the Regulations introduces one of the most significant and practically complex concepts in terms of interpretation in the entire framework: the principle of the single source.

The concept of a “single source” arises in the context of determining whether male and female workers are in a comparable situation for the purposes of assessing equal pay for equal work or work of equal value. A “single source” refers to a situation where the pay conditions for workers are established or determined by one centralised body or authority, even if the workers are formally employed by different legal entities.

In practice, this means that where a parent company sets the pay policies for its subsidiaries, or where a collective agreement governs remuneration across multiple employers within a bargaining unit, those employers are treated as forming a single source for the purpose of pay comparisons. Workers employed by different entities within such a group or bargaining structure can compare their pay with one another, because their remuneration is ultimately determined by the same central authority.

Article 8 makes clear that the assessment of whether workers are in a comparable situation is not limited to the following:

1. Workers employed by the same employer: Comparisons may extend to workers employed by different legal entities, provided their pay conditions derive from a single source.
2. Workers working at the same time: The comparator does not need to be a current colleague. A previous employee may be used as a comparator for the purposes of establishing whether equal pay has been achieved. This is a significant extension, as it prevents employers from avoiding scrutiny simply because one of the comparators has since left the organisation.

Furthermore, where no real-life comparator exists, that is, where there is no actual male or female worker whose situation can be used for comparison, the Regulations permit the use of a hypothetical comparator. A worker may demonstrate that they have not been treated the same way as a hypothetical comparator of another sex would have been treated in a comparable situation. This is particularly relevant in sectors dominated by one gender, where real-life comparators of the opposite sex may simply not be available.

A comparable situation is assessed by reference to the value of the work being performed. Workers are in a comparable situation where they perform:

1. the same work or work of equal value;
2. evaluated against objective, gender-neutral criteria including skills, effort, responsibility, and working conditions.

The assessment must not undervalue soft skills where they are relevant and must not rely, directly or indirectly, on criteria related to sex.

The practical significance of article 8 cannot be overstated. It means that a worker employed by a subsidiary in Malta can, in principle, compare their pay with a worker employed by a sister company, or even with a former employee of either entity, provided both entities derive their pay conditions from the same single source. This opens the door to cross-entity and cross-temporal pay comparisons that were not previously available under Maltese law, and it represents a fundamental shift in how equal pay claims may be framed and pursued.

*This is Part 2 of a four-part series on Malta’s Equal Pay (Transparency and Reporting) Regulations, 2026. In Part 3, we will examine the gender pay gap reporting obligations and the mandatory joint pay assessments that employers must undertake.

How Can AE Help

Malta’s new Equal Pay (Transparency and Reporting) Regulations, 2026 introduce new obligations around pay transparency, recruitment practices, and equal pay compliance. AE supports employers in reviewing pay structures, implementing objective and gender-neutral policies, and preparing for these new requirements.

Get in touch with AE to discuss how these changes may impact your organisation.