If your business is still “preparing” for the Pay Transparency Directive, that language is already out of date. Malta has now transposed the Directive into law through Legal Notice 173 of 2026, the Equal Pay (Transparency and Reporting) Regulations, 2026, and the new framework came into force immediately in time for the EU implementation deadline. Employers are therefore no longer being asked to get ready for change — they are expected to comply NOW.
Among the various obligations introduced by the new regulations, Article 5(1) and 5(2) deserve particular attention. They may not be the most publicly discussed provisions, but they are likely to become one of the most important practical compliance tests for employers. Why? Because Article 5 goes to the heart of a question many organisations have never properly documented before: how exactly do you determine pay?
Article 5 is not just about salary ranges
A common misconception is that pay transparency is mainly about publishing salary ranges in recruitment. That is only part of the picture. Article 5 is more fundamental. It concerns the criteria used to determine pay, pay levels, and, for larger employers, pay progression. If an employer cannot identify and explain the basis on which pay is set, it will be much harder to show that its pay structure is objective, gender-neutral and compliant with the principle of equal pay for equal work or work of equal value.
What this means for employers with 50+ workers
For employers with 50 or more workers, the obligation is the clearest and the most formal. These employers must establish in writing the criteria and policies they use to determine workers’ pay, pay levels, and pay progression, and that WRITTEN POLICY MUST BE ACCESSIBLE TO WORKERS AT ALL TIMES. In practice, that means the business should already have a framework explaining not only what people are paid, but also why they are paid that way and how progression works over time.
This is more significant than it may first appear. Many organisations rely on experience, performance, seniority or responsibility when making pay decisions. But Article 5 pushes employers beyond informal practice. If those criteria are not clearly defined and documented, the organisation may struggle to demonstrate compliance if its pay decisions are ever challenged.
What this means for employers with 25–49 workers
Employers with 25 to 49 workers should not assume that Article 5 only affects larger organisations. The available summaries indicate that this category MUST INTERNALLY DOCUMENT HOW IT DETERMINES PAY AND PAY LEVELS, even if it does not have to maintain the fuller written policy on pay progression required
for 50+ employers. In other words, mid-sized employers are not exempt from transparency — they are simply subject to a lighter version of the same principle.
And employers with 24 or fewer workers?
Employers with 24 workers or fewer do not appear to be subject to the same Article 5 written-policy or internal-documentation threshold. However, this should not be misunderstood as an exemption from the broader regulations. The equal pay framework still applies, and smaller employers must still ensure that pay decisions are based on lawful, objective and non-discriminatory criteria.
The practical takeaway
Article 5(1) and 5(2) are important because they expose a gap that exists in many businesses: pay practices (and even structures) often exist, but criteria is not documented. Malta’s new regime is now forcing employers to close that gap. For some, this means creating a written pay policy accessible to staff. For others, it means documenting internal criteria that may previously have existed only in the minds of managers. Either way, the message is the same: pay setting now needs documentation.
If you need support with implementing these requirements in your organisation, contact 📩 hr-services@emcs.com.mt
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