LIINA LAAS: “Pathetic and embarrassing”

Why Estonia’s war against pay transparency is a digital pioneer’s great betrayal

Estonia is calling pay transparency a bureaucratic burden. For a digital country, that is pathetic.

There are policy disagreements, and then there are moments when a government makes itself look embarrassingly small.

Estonia’s pushback against the EU Pay Transparency Directive is one of those moments.

The government's line, as reported by ERR, is that the directive imposes an excessive administrative burden and that there is no urgent need to change anything because, apparently, “things have been working so far.”

That sentence says more than it intends to. Things have been working for the people the current system already serves. Everyone else can keep waiting.

That is not leadership. That is privilege masquerading as pragmatism.

Let’s start with the most basic fact. Estonia has the highest gender pay gap in the European Union.

In 2024, the average unadjusted gender pay gap across the EU was 11.1%. In Estonia, it was 18.8%. Highest in the bloc.

Not slightly above average. Not a marginal issue. The highest.

So when a minister says things are “working so far,” the only honest response is: for whom?

Because if you are a woman in Estonia, the numbers suggest the system is not working. It is functioning exactly as designed: opaque enough to preserve unequal outcomes, vague enough to avoid accountability, and convenient enough for the people who benefit from it.

And that raises another question nobody in government seems eager to answer:

Who are the companies supposedly being protected here? Who exactly benefits from keeping pay opaque?

Because if pay practices are fair, transparency should not be a threat. If the directive is being treated as a threat, it is fair to ask what exactly some employers are afraid people will see.

The maddening part is that the EU directive is not some radical act of Brussels overreach. It is basic, overdue workplace hygiene. Member states have until 7 June 2026 to transpose it into national law. It requires employers to provide salary information or a pay range to candidates before interviews, bans questions about salary history, gives workers the right to ask for pay information for comparable roles, and requires larger employers to report gender pay gaps and take action if unjustified differences exceed 5%. ‘

Estonia’s own ministry already acknowledges that if employers transmit data through the Statistics Estonia data exchange service, Statistics Estonia can compile the report itself.

Read that again.

The government is calling this an unbearable bureaucratic burden, while its own ministry is already saying the state can automate part of the reporting.

For a country that has built an entire international brand around being digital, efficient and administratively smarter than everyone else, this excuse is not just weak. It is embarrassing.

We are the country of e-government, e-tax, digital signatures, interoperable state systems and startup mythology. We love to tell the world how advanced we are. But when the conversation turns to salary transparency, suddenly, Estonia discovers paperwork.

Please stop.

A country that can digitise taxes, prescriptions, company formation and public services does not get to claim that publishing salary ranges or reporting pay data is too complicated. If Estonia cannot handle structured pay reporting, then one of two things is true. Either our digital-state story is wildly overstated, or it only applies when the data is politically comfortable.

You cannot call yourself a digital pioneer and then hide behind paperwork when accountability comes into play.

The real issue here is not bureaucracy. It is exposure.

Pay transparency works because it removes the fog. It makes it harder to underpay people in silence. It gives candidates leverage before they even enter the interview room. It stops companies from anchoring offers to whatever someone was underpaid in their previous role. It forces leadership teams to confront whether their so-called meritocracy holds up under scrutiny.

The best companies understand this already. Transparent pay bands reduce bias, make hiring more consistent, build trust internally and cut the reputational risk of pretending to care about equality while keeping compensation opaque. The companies panicking about transparency are usually not the ones with clean hands.

And Estonia is not just behind on pay. We are behind on who gets funded, who gets backed and who gets allowed to scale.

In startups and venture, we love to talk about merit, speed and innovation, but the money tells a very different story. In Europe, female-founded startups raised €5.76 billion in 2024, which amounted to just 12% of all VC capital raised, according to Female Foundry’s 2025 Female Innovation Index, reported by Sifted.

That is not equality. That is structural under-allocation with a nice conference panel on top.

Estonia is hardly a shining exception. Startup Estonia’s own data shows that female founders still make up only about 16% of startup founders. In the first half of 2025, the share was 17% female and 83% male.

So this is the bigger point government seems determined to miss: pay inequality does not exist in isolation. It is part of a pipeline. Women are underpaid in employment, underrepresented in leadership, underrepresented among founders, and underfunded in venture. Then they are told the system is fair because there are a few visible exceptions.

That is how inequality survives in modern economies, not through a single dramatic act, but through a thousand “practical” decisions that keep producing the same outcome.

This is why the government’s stance feels so deeply backwards.

For years, many of us have been pushing for better hiring practices, more transparent workplaces, stronger standards and more honest conversations about who gets paid, who gets promoted and who gets funded. We keep being told Estonia is modern, competitive and future-facing. Then moments like this arrive, reminding you how shallow that story can be.

It feels like swimming against the current and realising that too many people in power are still perfectly happy with the old current, as long as it carries them.

There is also a level of irony here that would be funny if it were not so insulting. If Estonia delays or fails to transpose the directive by the deadline, the European Commission can launch infringement proceedings, and the Court of Justice of the EU can impose financial sanctions, including a lump sum and daily penalties until the country complies.

So let’s summarise the logic here.

Women do not get equal pay.

The government resists rules meant to make pay fairer.

And if Estonia keeps dragging its feet, taxpayers may also end up paying the bill.

What the hell?

Women will not get equal pay, and they will also have to pay the fines. Great stuff, people.

This is not a minor policy disagreement. It is a signal. It tells women that even when the evidence is overwhelming, even when the tools are straightforward, and even when the rest of Europe is moving, someone in power will still stand up and explain why fairness is administratively inconvenient.

For a country obsessed with being seen as smart, this is a spectacularly dumb hill to die on.

Estonia can do better than this. The fact that we still need to say that in 2026 is exactly the problem. We should pave the way with our digital excellence. It is clear what the priorities are. The minister who announced that “We’re willing to pay the fines” should be paying out of his own pocket.