EU member states have until 7 June 2026 to introduce local legislation implementing the Pay Transparency Directive. As per our recent blog, to date there have been very few developments on this front, but we are now starting to see the publication of draft legislation.
The Dutch government recently issued a Bill aimed at implementing the Directive (Wetsvoorstel implementatie richtlijn loontransparantie). The Bill does not include any provisions other than those that are strictly necessary to ensure compliance with the Directive – some good news for employers at least!
The Ministry of Social Affairs and Employment plans to submit the Bill in Quarter 3 of 2025 to the House of Representatives, although this timescale may be subject to change. It is currently subject to an online consultation process, which will close on 7 May 2025. The Bill is due to come into force on 7 June 2026, i.e. in line with the deadline for compliance by member states.
The Netherlands already has legislation in place that meets some of the obligations imposed by the Pay Transparency Directive, but the Bill introduces various new measures that are intended to reduce the wage gap between men and women by increasing transparency about pay and to strengthen the rights of employees who wish to exercise their right to equal pay. The transparency measures are also intended to serve as an incentive for employers to reward their staff objectively and demonstrate good employer practices. The key measures are as follows:
- Pay structures: Employers must have pay structures in place that are based on objective and gender-neutral criteria. These criteria should enable the determination of the value of work and the renumeration linked to it.
- Pay transparency before hiring: Job applicants will have the right to request and receive information from a (potential) future employer about their starting pay or pay range. Employers will no longer be allowed to ask applicants about their previous pay history.
- Transparency of remuneration and remuneration progression policies: Employers must provide employees with easy access to the criteria used to determine their pay. Pay is defined as the compensation owed by the employer to the employee for their work, consisting of the base salary and any supplementary or variable components. Employers with 50 or more employees must also provide information with respect to the criteria used for pay progression.
- Right to information: Employees will have the right to receive written information about their pay, as well as the gender-disaggregated average pay levels of employees performing equal (or equivalent) work.
- Pay gap reporting obligations: Employers with 250 or more employees must report annually on any gender pay gap, whereas employers with 100 to 249 employees must report every three years. In line with the Directive, the first pay reporting date will be 7 June 2027. There is no reporting obligation for employers with fewer than 100 employees. This represents a significant change for Dutch employers, as the Netherlands does not currently require employers to carry out gender pay gap reporting.
- Joint pay assessment: In line with the Directive, if the pay report reveals an unjustified difference of at least 5% in the average pay between female and male employees performing equal (or equivalent) work, and this difference is not rectified within six months after submitting the report, employers will be required to conduct a joint pay assessment with their employee representatives.
- Measures for legal protection: The provisions on legal protection in the Directive largely align with the existing Dutch system. For example, employees in the Netherlands already have the ability to bring legal proceedings and the right to claim damages. Three new provisions are being introduced: a (further) reversal of the burden of proof in cases of non-compliance with these new transparency obligations; protection for employees against retaliation; and the possibility for a court to order an employer to pay the legal costs of the proceedings even if the employer is successful, if there were valid reasons to file the claim (in the context of equal pay claims).
Although the Bill will not come into effect until 7 June 2026, it is essential that employers start preparing now considering the scope of the upcoming changes. This is particularly important given that, starting in June 2026, the burden of proof will shift in favour of employees, placing employers at a disadvantage. Employers can take proactive steps by, for example, reviewing their current job evaluation method (or implementing one if none exists), auditing recruitment procedures, and establishing processes to monitor and analyse the pay disparity between male and female employees from the outset.
Lastly, in the Netherlands, companies with 50 or more employees are legally required to set up a works council. The works council is expected to play a key role in ensuring compliance with the upcoming pay transparency rules. Employers that meet the 50-employee threshold but have not established a works council will find themselves unable to fulfil certain obligations under the new legislation. The Dutch legislator has deliberately chosen not to provide an alternative mechanism for such situations. This means that if no works council has been established and there are 50 or more employees, it is crucial for companies to act promptly and take the appropriate steps towards the establishment of a works council.