Don’t Forget Category of Worker Reporting!
If you’re implementing the EU Pay Transparency Directive, you’re probably focusing on eliminating the 5% pay gap for the mandatory reporting that you must submit to the authorities. But there is a second set of reporting called “Category of Worker reporting” that is equally important. Today, I’m breaking down this requirement and why it matters.
What exactly is Category of Worker reporting?
The Directive states:
(36) All workers should have the right to obtain information, upon their request, on their individual pay level and on the average pay levels, broken down by sex, for the category of workers performing the same work as them or work of equal value to theirs.
This means that you must provide employees with information about their salaries or wages compared to the mean (or average) of others doing the same or equal work within your organization. You’ll also have to report it based on complementary or variable components of pay.
Think of it as giving your employees a map of where they stand. For each category of worker, employees should be able to see the average pay levels. This isn’t about revealing individual salaries: it’s about showing the pay landscape for comparable roles. The goal? To empower employees with information so they can assess whether they’re being paid fairly relative to their peers. And I would strongly encourage you to include the median in that reporting as well, even though it’s not required under the Directive (but check your local legislation).
How do I define a “category of worker”?
The Directive gives you some flexibility here, but it needs to be based on objective criteria. You might categorize by:
- Job title or role (all “Marketing Managers”)
- Seniority level within a function
- Job family and level combinations
- Work that is equal or of equal value
The key is consistency and objectivity in gender-neutral terms. You can’t create categories that hide pay disparities or make meaningful comparisons impossible. If your categories are too broad (everyone is just “staff”) or too narrow (every person is their own category – I see this a lot!), you’re missing the point.
Why should I show both mean AND median?
Mean and median are equally important because these two metrics tell a different story. If you share one without the other, employees might draw the wrong conclusion about their pay.
Let me illustrate that with a practical example. (For simplicity reasons, I’ve not broken it down by gender, but you will have to.) Say you have five workers in the same category earning the following annual salaries (in euros):
- Worker A: €8,000
- Worker B: €9,000
- Worker C: €10,000
- Worker D: €12,000
- Worker E: €17,000
This is what that looks like:
The mean (average): Add them all up and divide by five. (8,000 + 9,000 + 10,000 + 12,000 + 17,000) ÷ 5 = €11,200
The median (middle value): Line them up in order and pick the middle one, where 50% of the workers earn more and 50% earn less. That’s Worker C at €10,000
Notice the difference? The mean is €1,200 higher than the median. Why? Because Worker E’s €17,000 salary is pulling the average up. Outliers, either at the top or bottom of the pay level, can have an outsized effect on the mean or average. I’ll come back to that.
So what does this tell employees?
If you’re Worker C earning €10,000, and you only see the mean of €11,200, you might think you’re underpaid. You’re earning below average, after all.
But when you also see the median of €10,000, you realize you’re right in the middle of the pack. Half your peers earn less, half earn more. That’s a completely different picture.
And here’s the flip side: if you are Worker B earning €9,000, seeing both numbers tells you something important.
You’re not just slightly below average: you’re also below the median. That might prompt a legitimate conversation about whether your pay is fair. Of course, you can’t only determine that by looking at pay – you’ll have to take the requirement per pay quartile (if applicable) into consideration as well. (Also important: if you compare the two pictures, you’ll note that an individual employee receives far less detailed pay info!)
What about those outliers?
This is exactly why both metrics matter. Outliers can dramatically skew the mean while leaving the median relatively untouched, especially if you have larger employee groups than the five in my example (and I highly recommend you do!).
Here, Worker E at €17,000 is an outlier. Maybe they’ve been with the company for 20 years, have specialized skills, or were hired away from a competitor. Maybe they came in through an acquisition (very common). As they are an outlier to the pay level, they will likely not receive any increases until the pay scale catches up with them. But for now, their salary significantly impacts the mean, while the median shows you what’s typical.
If you only reported the mean, you’d be giving employees a distorted view of reality. They’d think the “average” person in their category earns €11,200, when actually most people earn somewhere between €8,000 and €12,000.
The median is resistant to outliers. It shows you the true middle ground, which is often more representative of what most employees actually earn.
How often do I need to update this information?
You’ll need to provide this information to employees upon request, and the underlying data needs to be current. You must also inform employees annually how they can request it. When an employee requests the data, you must provide an answer within two months.
Keep in mind that you’ll also be doing formal pay gap reporting to authorities (annually for larger organizations, every three years for smaller ones), so it makes sense to align your internal reporting cycles with that. And check your local legislation to see if they add requirements to the Directive.
What if the data reveals uncomfortable truths?
Here’s the thing: it probably will. And that’s actually the point.
If you discover significant gaps between the mean and median, or if you notice certain employees are consistently at the bottom of their category without clear justification other than their gender, that’s information you need to act on. The Directive isn’t just about reporting—it’s about creating the pressure and transparency needed to drive change.
Use this data as a diagnostic tool. Where are the outliers? Why do they exist? Are your categories defined appropriately? Is there a pattern of newer employees being paid more than longer-tenured ones, or vice versa?
This internal reporting requirement is your early warning system. It’s much better to identify and address issues proactively than to wait for formal complaints or external investigations.
The bottom line
Category of Worker reporting isn’t just a compliance checkbox: it’s a powerful tool for building trust and ensuring fairness in your organization. By showing both mean and median pay, you give employees an honest, complete picture of where they stand.
Yes, it might surface some uncomfortable conversations. But those are conversations you should be having anyway. Better to address pay equity proactively than to be forced into it later.
Keep in mind that transparency isn’t the enemy. Unfairness and inequality is. This reporting requirement just makes the it harder to ignore. And that’s exactly what we need.