Pay transparency also applies to employers with fewer than 100 employees

Not every employer will have the same obligations

The exact Dutch implementation will determine the final requirements. Although Dutch legislation is expected to enter into force only on 1 January 2027, employers can already prepare for the new pay transparency requirements.

Broadly speaking, it is important to distinguish three groups:

“Fewer than 100 employees” is therefore not a uniform category. An employer with 30 employees may face different transparency obligations than an employer with 75 employees. However, both face the same fundamental question: are pay decisions objective, gender-neutral and explainable?  

No reporting obligation, yet pay must be explainable

For smaller employers, the biggest risk does not lie in the absence of a report. It lies in informal pay decisions that have developed historically, but later prove difficult to explain consistently or objectively.

An employee may request information about their own pay and about the average pay levels of employees performing the same or equivalent work, broken down by gender. The employer must handle such a request carefully and within the applicable response period. Under the current framework, this is assumed to be a period of two months.

That requires more than an extract from the payroll administration. The employer must first be able to determine which roles are the same or equivalent, which criteria justify a difference and what any individual deviations are based on. Without this foundation, a response is quickly ad hoc, inconsistent or insufficiently substantiated.

What if an employee asks questions?

A practical question for every employer is:

If an employee asks tomorrow why a colleague earns more, can you explain that objectively?

Particularly within smaller organisations, salary arrangements are often historically driven. Sometimes roles are not described up to date, there is no clear job framework or individual salary arrangements have arisen because of labour market shortages or negotiations. That does not necessarily have to be wrong, but it is becoming increasingly important that pay differences are explainable.

The risk for smaller employers is not that they cannot submit a report, but that they cannot respond to an individual information request in a careful, timely and consistent manner.

Recruitment is also changing

Pay transparency starts before hiring. Employers should therefore consider, among other things:

• information about the starting salary or salary range before employment negotiations;
• gender-neutral job titles and vacancy texts;
• not asking for a candidate’s salary history;
• objective criteria for selection and grading.

This is a realistic first step, especially for smaller employers. Vacancy templates, standard questions and agreements on salary levels are relatively easy to adjust. This not only makes the process more transparent but also reduces the likelihood that previous, possibly inexplicable pay differences will be repeated with new hires.

You do not need to build a comprehensive job framework immediately

A small company does not need to approach pay transparency as a large-scale legal or HR project right away. Start with the roles where scope, responsibilities or pay are unclear. Then document which objective criteria determine pay and pay growth, such as job weight, relevant experience, responsibilities and knowledge.

Job descriptions and job evaluation help compare roles objectively. But the approach must suit the size and complexity of the organisation. The goal is not to create as much policy as possible. The goal is to ensure you can reconstruct, assess and explain key pay decisions.

Can you answer these four questions immediately?

1. Which roles within your organisation are the same or equivalent?
2. Which objective criteria determine pay and pay growth?
3. Where are individual deviations documented and substantiated?
4. Who responds to an employee’s information request?

Start small, but do start

Waiting for the final legislation may seem efficient, but much of the preparatory work is unrelated to the final legal details. Up-to-date job descriptions, clear pay criteria, documented deviations and consistent recruitment communication are valuable now.

Pay transparency does not mean that everyone has to earn the same. It does mean that differences must be based on objective, gender-neutral grounds and that you can explain those differences. Organising this now prevents questions from having to be answered later under time pressure and on a case-by-case basis.

Do you want to know where you stand?

Do we already handle your payroll administration? Then pay transparency can be a logical next step based on existing insights into pay. Payroll data shows that differences exist. The next question is why those differences exist and whether the justification holds up.

That is where Payroll, HR advice and Employment Law come together. We support you in updating job descriptions, setting up an explainable job framework, assessing pay criteria and preparing your organisation for pay transparency.

Contact us