The core of the advice
Implementation deadline of the directive and final date for first pay reporting
The Netherlands is exceeding the implementation deadline of 7 June 2026. The legislative proposal does not sufficiently address the legal risks that arise from this. In addition, the proposed date for the first pay reporting deviates from what the directive prescribes, which the Advisory Division considers legally untenable. The directive does not provide any scope for setting a later date, not even when the implementation deadline has been exceeded. Postponement is not possible under the directive. The Advisory Division therefore advises explicitly addressing the consequences of exceeding the implementation deadline and aligning the first pay reporting with the directive: no later than 7 June 2027. This means that organisations with 150 or more employees may be required to submit their first report by 7 June 2027.
Protection of personal data
Pay data can be indirectly traceable to individual employees. The Advisory Division highlights two important bottlenecks here. Firstly, the legislative proposal does not sufficiently explain how employers can limit the use of traceable data to the lawful purpose, namely the exercise of the right to equal pay. The directive offers an explicit instrument for this, but this instrument has not been implemented in the legislative proposal. Secondly, the legal basis for the processing of personal data under the GDPR is insufficiently elaborated. According to the Advisory Division, a legal obligation is the most appropriate basis, but this is not clearly substantiated in the explanatory memorandum.
Non-binary persons
The legislative proposal does not clarify whether, and if so how, the remuneration of non-binary persons should be included in the pay reporting. The Advisory Division advises that this be clarfied explicitly.
Member state option
The directive offers Member States the possibility to opt for a national public authority to prepare the pay reports, instead of employers themselves. This can reduce the administrative burden and increase the comparability of data. The Netherlands has not made use of this so-called Member State option. As a result, the Labour Inspectorate will only be able to check whether reporting has been carried out, and not whether the content of the report is correct. According to the Advisory Division, the consideration of whether or not to make use of this Member State option has been insufficiently substantiated.
Monitoring body
The directive requires the designation of a supervisory monitoring body. Employers report to this body on pay differences, after which the body collects and publishes the data. The government intends to assign this role to Policy Implementation Agency (UVB), part of Service, Partnerships and Implementation (DSU) within the Ministry of Social Affairs and Employment. However, the government only considers it plausible that DSU can carry out this task. The Advisory Division considers this substantiation insufficient and advises providing clarity quickly. If DSU is designated as the monitoring body, the tasks must be formally assigned to the Minister of Social Affairs and Employment. In addition, it is still unclear whether DSU can meet all requirements in time.
What does this mean in practice for organisations?
The advice of the Advisory Division highlights a number of shortcomings in the legislative proposal.. The main bottlenecks lie in execution and legal substantiation. At the same time, the direction of the law is clear. As soon as the law enters into force, obligations for employers will apply immediately. Organisations with 150 or more employees may be required to submit their first report 7 June 2027.
Because the Netherlands has not made use of the Member State option, the Labour Inspectorate will only check whether reporting has been carried out, not whether the content of the report is correct. This may sound reassuring, but the risk should not be underestimated. Employees can indeed take legal action on the basis of the obtained pay information. Moreover, pay data may be traceable to individual employees. In that case, strict requirements apply under the GDPR. Timely attention to data management and the design of HR processes is therefore essential.
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