Last updated 2025-08-22
Quick overview
Denmark has one of the oldest equal pay laws in Europe. The Equal Pay Act first came into force in 1976 and prohibits any form of pay discrimination between men and women. Employers with 35 or more employees must either submit gender-segregated pay data or provide an equal pay report every year.
The framework is built on employee consultation. Pay statistics are shared with staff and their representatives to highlight possible pay gaps. At the same time, boards of listed companies must set gender balance targets for leadership.
While the rules are well established, the upcoming EU Pay Transparency Directive will require Denmark to introduce stronger obligations by 2026.
Reporting requirements
Which companies must report?
Private and public employers with 35 or more employees must comply.
Reporting applies when there are at least ten women and ten men in the same job function, classified according to a six-digit DISCO code (the Danish version of the International Standard Classification of Occupations).
Companies in farming, gardening, forestry, and fisheries are exempt.
The Danish Act on Gender Balance applies separately to listed companies with more than 250 employees or larger annual turnover. These companies must set gender targets for boards and disclose their progress.
What information needs to be reported?
Employers can choose between two options:
1) Gender-segregated pay statistics
– Submitted to Statistics Denmark, which provides the employer with annual statistics on pay gaps.
– Covers groups with at least ten men and ten women in the same DISCO category.
– Focuses on pay levels for time-based employees. Performance-paid employees are excluded.
2) Equal pay report
– Can be submitted instead if the employer and employee representatives agree.
– Must include a description of the factors influencing pay, a plan to reduce gender pay gaps, and a follow-up procedure.
– Action plans can run over three years.
When and where to send the data?
Employers must submit raw pay data to Statistics Denmark each January, or prepare the statistics internally.
The results are shared with employees by 31 December each year, covering the previous year’s data.
Who can see the results?
Pay gap statistics are not published publicly. They are shared internally with employees and their representatives.
However, the obligation to inform staff means that employees can request and access the data.
Listed companies under the Gender Balance Act must also disclose their gender targets and progress in their annual reports.
Equal pay laws
The Consolidation Act on Equal Pay to Men and Women prohibits any pay differences based on gender. Employers must pay men and women the same for the same work or work of equal value.
If a company uses a professional classification system to determine pay, it must be based on gender-neutral criteria. Pay is broadly defined to include base salary, bonuses, benefits in kind, and other compensation linked to the employment relationship.
Job advertisements cannot specify a preference for gender or other protected characteristics.
Pay confidentiality clauses are unlawful. Employees can freely disclose their own pay to anyone they
Employee rights
Employees have a right to information on equal pay statistics or equal pay statements.
If employees elect board members, gender targets under the Gender Balance Act also apply to those positions.
If an employee believes they are underpaid compared to a colleague of the opposite gender doing the same or equivalent work, they can claim the pay difference. The burden of proof lies with the employer to demonstrate compliance.
Risks of non-compliance
If an employer fails to report to Statistics Denmark, it must produce its own pay statistics. Non-compliance can lead to fines.
Violations of the Equal Pay Act may result in employees receiving compensation for lost wages.
Failure to comply with the Gender Balance Act can also lead to fines, and candidates who were discriminated against in recruitment may be awarded compensation.
Enterprises may be held criminally liable under the Danish Criminal Code for repeated or serious breaches.
What will change by 2026
New EU-wide rules
The EU Pay Transparency Directive will apply by June 2026. Minimum obligations for all EU countries include:
– Pay transparency for job applicants, including information on pay levels in job postings or before interviews
– A right for employees to request pay information by gender for categories of workers doing the same or equivalent work
– Annual pay gap reporting for employers with at least 100 employees (with phased-in thresholds)
– Joint pay assessments where pay gaps exceed 5 percent and cannot be justified by objective, gender-neutral factors
– A ban on pay secrecy clauses in employment contracts
How Denmark is likely to apply them
Denmark has not yet proposed a bill to implement the directive. However, changes are expected to include:
– A requirement for all employers to describe objective gender-neutral criteria behind wage levels
– Stronger transparency obligations for employers with 100+ staff
– Possible alignment of Danish reporting systems with EU-wide disclosure and employee rights
Employers should prepare by reviewing pay structures, ensuring classification systems are objective, and documenting criteria used in salary decisions.
FAQ
Do all companies have to report pay gaps in Denmark?
No, only employers with at least 35 employees and at least ten men and ten women in the same job function.
Are performance-based employees included in the statistics?
No, only employees paid by time are covered.
Can employers avoid sending data to Statistics Denmark?
Yes, if they agree with employee representatives to prepare an equal pay report instead.
Are the results public?
No, they are shared with employees internally, but not published online.
What happens if a company ignores the reporting obligation?
They must prepare their own pay statistics and may face fines.
Is there a duty to close a gender pay gap?
No, but pay statistics may provide grounds for employees to sue under the Equal Pay Act.
Can employees talk openly about their salary?
Yes, confidentiality clauses are unlawful.
Are job ads allowed to state gender preferences?
No, this is prohibited.
What is the DISCO code?
It is the Danish version of the international classification of occupations, used to group employees with the same job function.
Do small companies have any obligations?
No, only companies with 35 employees or more fall under the current reporting rules.
What if a company has fewer than ten men or women in a job function?
Those groups are excluded from the statistics to protect anonymity.
What sanctions exist under the Gender Balance Act?
Companies can be fined, and candidates may receive compensation.
When will the EU directive apply?
All EU countries must implement it by June 2026.
Will the EU directive apply to Danish employers under 35 employees?
Yes, it will eventually cover all employers with 100 or more employees, regardless of current Danish thresholds.
How should employers prepare now?
By reviewing pay systems, ensuring objective criteria are used, and setting up systems to produce gender-segregated statistics more easily.
Helpful resources
– Statistics Denmark: www.dst.dk
– Danish Ministry of Employment: Equal Pay Act overview
– European Commission: EU Pay Transparency Directive updates
– International Labour Organization: ISCO classification system
Contact us
Book a meeting with our country partner Klar Reward Agency to learn more about how Sysarb can help your company with Pay Transparency compliance.
Veronica Fridfeldt Hoff
Partner, Reward Advisory
Klar Reward Agency
Stine Malmborg
Senior Reward Advisor
Klar Reward Agency
