If your organization operates in the EU and has over 100 employees, you will face a hard legal deadline in 2026.
Under the EU Pay Transparency Directive, you’ll be legally required to publish salary ranges, prove your compensation decisions are fair, and show that roles across the organization are leveled based on objective criteria.
Most tech organizations aren’t ready.
Job descriptions are often vague, and titles such as “Senior” or “Lead” vary significantly in scope and compensation across different teams. Promotions still rely on gut feeling, and employees at the same “level” can receive drastically different compensation, often without any documented reason. And pay bands, if they exist, live in spreadsheets no one trusts.
The only way to stay compliant and avoid chaos is to establish a structured and transparent job leveling framework. In this article, we’ll explain why that matters, break down the steps to build one, and show how teams can do it without starting from scratch.
Why this matters: the 2026 deadline isn’t optional
The EU Pay Transparency Directive requires all organizations with over 100 employees to define clear job criteria, disclose salary ranges, and prove that pay differences are based on objective, documented factors.
That means no more vague job titles, no more gut-feel promotions, and no more silent salary gaps.
To comply, you’ll need:
- A structured job leveling framework that defines responsibilities, scope, and expectations by level.
- Documented promotion criteria and salary bands.
- A way to show that compensation decisions are fair, consistent, and role-based.
💡 Under the EU Pay Transparency Directive, companies will be required to demonstrate a clear and defensible system for leveling and compensation, especially in cases of unexplained pay gaps. See EY’s summary for practical implications here.
Most organizations aren’t there yet. Promotions still rely on the manager's opinion. Pay bands live in isolated files. And job definitions shift from team to team.
By 2026, that won’t be good enough.
Why the directive matters: pay gaps put you at risk
Pay inequity isn’t theoretical. It’s deeply embedded across the EU. Without a clear leveling framework, your organization is exposed to legal, reputational, and compliance risks.
💡 In 2021, the average unadjusted gender pay gap across the EU was 12.7%—meaning women earned nearly 13% less per hour than men. That gap only drops to around 12% in 2023 despite slow progress.
The directive targets this issue directly:
- Organizations must share salary ranges and explain any gender pay gap exceeding 5%.
- Any unjustified gap triggers a mandatory joint pay audit, with input from worker representatives, and remedies are implemented to address the inequities.
With no leveling framework:
- Salaries are set based on subjective titles and the manager's discretion.
- Employees in the same role can draw wildly different pay.
- Your team can’t prove fairness or defend compensation decisions under scrutiny.
A job leveling framework gives you the structure to define clear levels, map salary bands, and objectively explain any legitimate pay differences. And all of this isn’t optional by 2026, but a legal and strategic necessity.
💡 The Times reports that if an organization identifies a gender pay gap above 5%, the EU directive mandates a formal audit involving employee representatives. Pay differences must be backed by documented, objective criteria, such as job scope, skills, or level.
What is a job leveling framework (and why it’s so hard to build one)
A job leveling framework is a structured system that defines job levels, responsibilities, competencies, and expectations across roles, typically grouped into role families such as engineering, design, or operations.
Instead of vague titles like “Senior Developer” or “Lead Something,” each level is tied to specific skills, scope, and impact. This creates clarity for compensation, promotions, career growth, and, as of 2026, legal compliance.
But designing one isn’t easy.
Most teams hesitate to start because they worry the framework won’t reflect the reality of different roles and seniorities. It’s challenging to design a single structure that feels equitable for both junior support roles and senior engineers. The fear isn’t just about time, but about whether the system will hold up.
Other common blockers:
- Roles have grown organically, with no shared structure;
- Promotions still run on informal criteria;
- Compensation decisions are made in isolation, not tied to defined levels.
The result: one person’s “senior” is another team’s “mid,” and salary benchmarking becomes guesswork. By 2026, that won’t be enough. Frameworks must be clear, role-based, and defensible.
How to build a job leveling framework that meets the EU Pay Transparency Directive
You don’t need a PhD in organizational design structure to build a job leveling framework. But you do need structure and a shared definition of what “senior,” “lead,” or “next step” actually mean in your organization.
This isn’t just good practice. By 2026, having a structure like this will be a legal requirement under the EU Pay Transparency Directive.
Here’s how tech teams typically do it when they want to stop guessing.
1. Define role families
Start by grouping roles into logical categories, such as engineering, product, design, or operations. Each role family should have its own leveling path because seniority is measured differently across disciplines.
For example, transitioning from mid to senior engineer might mean encountering deeper technical complexity, while a customer success role could involve handling higher-value clients or managing escalations.
What should remain consistent across role families are core behaviors, such as ownership or communication. These values reflect how the organization expects people to work, regardless of their role. But the way seniority is assessed within those values varies by domain.
2. Assign skills and behaviors per level
This is where most frameworks fall apart; they stay too vague. Instead, write down what someone at each level is expected to demonstrate.
Not a “strong communicator.” But: “Can lead async conversations across functions with clear written updates.”
Define expected skills in areas like:
- Communication
- Problem-solving
- Technical depth
- Collaboration
- Ownership and leadership
Use real behaviors and language your team already understands.
3. Set levels
Within each role family, define a progression of levels, often starting with 3 to 5 levels for smaller teams, and expanding as the organization grows. The number of levels shouldn’t be fixed based on best practices, but tailored to the actual complexity and size of your organization. For example, a 50-person team rarely needs 7 distinct levels per role.
Each level should represent an increase in scope, autonomy, and complexity of work. These three dimensions are commonly used because they give structure to otherwise subjective decisions:
- Scope: What kind of work does the person own? Is it a feature, a function, or an entire team?
- Autonomy: How independently do they operate? Do they need close guidance, or do they lead without oversight?
- Complexity: What kind of problems are they expected to solve? Are they routine, cross-functional, or strategic?
These questions help you define what each level really means beyond job titles. A mid-level designer is expected to deliver scoped work independently, while a senior one may lead projects that span both product and engineering.
4. Align compensation bands
Once levels are in place, connect them to salary ranges, not per person, but per level.
Start by benchmarking each level against reliable market data, which can include public salary benchmarks, internal comp history, or region-based ranges, and adjust based on your organization’s compensation philosophy (e.g., mid-market vs. top-tier).
For example:
L3 backend engineer = €52–58k
L5 backend engineer = €70–78k
This helps eliminate bias and supports fair, consistent decisions, especially as your organization scales or expands into new markets.
It also prepares you for 2026, when publishing salary ranges becomes mandatory under the EU directive on pay transparency.
5. Connect leveling to promotion criteria
Leveling isn’t just a way to describe roles. Done well, it becomes the foundation for promotions. The criteria for moving to the next level should already be built into your framework: the expected skills, scope, and behaviors at each level clearly outline what someone needs to demonstrate to advance.
To validate this growth, many teams use structured 360 feedback, collecting input from peers, managers, and the employee themselves, to paint a full picture of readiness.
This doesn’t have to be rigid. But it should be concrete:
→ "Has led a full project from start to finish across at least two teams."
→ "Regularly mentors junior team members and documents shared learnings."
When leveling and promotion are aligned, career growth becomes transparent and coachable, not based on gut feeling or internal politics.
6. Communicate clearly and revisit regularly
If your framework lives in HR’s inbox or a forgotten Notion page, it won’t work. Make it accessible and practical, and incorporate it into regular conversations.
- Use it in 1-on-1s and performance reviews.
- Refer to it during the hiring and onboarding process.
- Revisit it at least once a year during major organizational or market changes to keep it relevant.
A good leveling framework isn’t static; it evolves with your team.
How Buffer uses transparent leveling
One company that has taken job leveling seriously and made it public is Buffer. Their entire salary system is based on a transparent framework that combines role, level, and location-independent pay bands.
Every employee at Buffer can see:
- A clear breakdown of levels per role;
- What’s expected at each level;
- The exact salary band tied to their level, with no hidden ranges or guesswork.
They also publish a salary calculator, allowing anyone (both internally and externally) to see how compensation is structured. Levels are tied to clearly defined expectations, and promotions follow a visible, written process.
What this solves:
- No more subjective decisions about who is “senior”.
- No silent pay gaps. Differences are tied to scope, not negotiation skills.
- Career growth is closely aligned with skill development, rather than solely based on tenure or visibility.
This kind of structure is precisely what the EU directive on pay transparency is advocating: transparent, fair, and justifiable pay systems based on documented levels rather than subjective assessments.
How Kadar helps you build and maintain a job leveling framework
Most teams want to be fair. But without structure, fairness is impossible to prove, especially under legal scrutiny. That’s where Kadar helps.
Kadar gives you everything you need to define, apply, and maintain a job leveling framework, even if you’re starting from scratch.
Here’s how it works:
Leveling frameworks aren’t one-size-fits-all, and most teams don’t want something rigid. That’s why Kadar is designed for full customization. You can:
- Use building blocks to define levels, skills, and expectations completely on your own, from scratch
- Start from tech-inspired templates to save time and borrow proven structures
No matter your organizational chart or team structure, Kadar gives you the tools to build a system that fits how you work, not the other way around.
- Role-specific customization
Not every team needs the same leveling path, and Kadar reflects that. You can define multiple frameworks at once, each tailored to a specific role family or career track. Whether you want separate paths for ICs and managers or different structures for engineering and product, the system supports it. No more forcing all roles into one model.
- Skill definitions tied to each level
Both technical and soft skills are clearly described per level, making expectations transparent and development actionable.
- Integrated feedback and performance tracking
Kadar connects self, peer, and manager input to each person’s level. Everyone sees where they stand and why, all displayed on an integrated team member profile.
- Trackable promotion criteria
Set growth expectations, define what readiness looks like, and connect it to real outcomes over time in one place with a team member profile.
Kadar doesn’t just help you stay compliant. It enables you to make better decisions grounded in data rather than gut feeling.
Most teams want to reward fairly and support growth, but without structure, decisions feel inconsistent and gaps go unexplained. With the EU directive on pay transparency making these issues visible to regulators, your leveling system needs to hold up.
Kadar helps you build that system: clear roles, defined expectations, and growth paths your team and leadership can trust.
