The starting point: greater transparency among employers increases the likelihood that unjustified pay differences will come to light more quickly and can be addressed. European legislation will come into force from June 2026, so companies have work to do. In particular, companies with more than 100 employees will face additional administrative burdens: they must report on pay transparency. However, smaller companies will also not escape the obligation to adopt a more transparent pay policy. Read on to find out what needs to be done.
The pay gap: a structural problem
The principle of equal pay for men and women for equal or equivalent work has been enshrined in European law since 1957: Article 157 of the Treaty on the Functioning of the European Union and Directive 2006/54/EC.
Yet women in the Netherlands still structurally earn less on average than men.
There are two types of pay gap:
- The unadjusted pay gap shows the average difference in pay between men and women. No account is taken of factors such as experience and education or other objective factors.
- The adjusted pay gap does take these factors into account (such as job level, education, experience). What then remains points to possible unjustified inequality.
Draft bill: the status (update June 2026)
The general lack of transparency regarding pay levels within organisations can lead to gender-related pay discrimination that is difficult to identify or prove. The European directive aims to ensure equal pay for equal or equivalent work and to combat discrimination on the grounds of sex. Member States of the European Union must incorporate the measures from this directive into their own legislation by 7 June 2026 at the latest.
The Netherlands is currently in the implementation phase of the Bill implementing the Directive on pay transparency for men and women. The government is working on the further elaboration and execution of this proposal. Recently, the Netherlands announced that the entry into force of the law has been postponed to 1 January 2027 (instead of June 2026). Member States were required to transpose the Directive by 7 June 2026. The Dutch government has indicated that this deadline is not feasible and currently aims for entry into force on 1 January 2027. The delay may give rise to legal risks, including a possible infringement procedure by the European Commission.
On 20 January 2026, the Minister of Social Affairs and Employment submitted the bill implementing the Directive on pay transparency for men and women to the Council of State.
What is included in the bill?
The bill aims to promote equal pay for men and women through the introduction of pay transparency measures. Although pay differences are decreasing, they remain substantial and the decline is too slow, particularly in the private sector.
The bill and the associated transparency obligations apply to all employers and employees, regardless of sector or size. The reporting obligation applies only to employers with at least 100 employees.
The Dutch legislator opts for a ‘pure implementation’: only what is necessary is included in the law. In summary, this involves the following measures:
- Equal pay for work of equal value: As an employer, you must have a system for job evaluation and classification that ensures equal pay for equal or equivalent work. This forms the basis for assessing whether employees are in comparable situations in terms of the value of work and thus for determining pay for equal or equivalent work.
- Transparency obligations for all employers: There are various measures aimed at transparency. For example, employers may no longer ask candidates about their salary history and job advertisements must be gender-neutral, as must job titles. In addition, employees gain the right to insight into the criteria for pay determination and pay progression, as well as into the average remuneration of colleagues in comparable roles. This requires openness about the organisation’s remuneration and pay progression policy. Employers who generally employ fewer than 50 employees are, however, exempt from the obligation to grant employees access to the criteria for determining pay progression.
- Reporting obligation: Employers with 100 or more employees must report average pay differences to a (yet to be established) monitoring body. The reporting frequency depends on the number of employees within the organisation and varies from once every three years for 100 to 249 employees, to annual reporting for 250 or more employees. Internal communication within the organisation will also be required. The report must provide insight into the average and median pay differences between men and women within the organisation, including base salary and any additional or variable remuneration.
- Pay evaluation: Employers are required to draw up an action plan (pay evaluation) to identify, remedy and prevent pay differences in the future if, within a category of employees performing work of equal value, a difference in average pay levels between men and women of 5% or more is identified, this difference cannot be justified on the basis of objective and gender-neutral criteria, and the employer has not resolved the unjustified difference within six months of submitting the pay report. The employer must involve the works council in the pay evaluation.
- Legal protection (shift in burden of proof): The bill improves the legal protection of employees by introducing a shift in the burden of proof in pay claims, strengthening their position in legal proceedings. Do you fail to comply with the transparency obligations, the reporting obligations or, if necessary, the pay evaluation? Then a legal presumption of pay discrimination arises, and in the event of suspected unequal pay the burden of proof shifts to you as the employer. You must then demonstrate that there is no prohibited distinction if employees or their representatives bring a civil claim.
- Supervision and enforcement: The Netherlands Labour Authority (NLA) monitors compliance. The Netherlands Labour Authority will monitor compliance with the relevant obligations. The Council of State has noted that this supervision will largely be administrative in nature, as the Labour Authority can assess whether a pay report is present but may not be able to verify its substantive accuracy.
- Monitoring and awareness: A monitoring body will be designated for the collection, publication and monitoring of pay reporting data. Following the advice of the Council of State, the bill has been amended so that these tasks are assigned at statutory level to the Minister of Social Affairs and Employment. This body analyses causes and collects data from employers and complaints submitted to the Netherlands Institute for Human Rights, as well as reports of pay evaluations under the legislation. The monitoring body will collect and publish pay reporting data and provide the required information to the European Commission. Supervision and enforcement will primarily fall within the role of the Netherlands Labour Authority.
What does this mean in practice for employers and HR professionals?
1. Establish an objective job evaluation and classification system
You are required to establish pay structures fully based on objective and gender-neutral criteria, so that you can define categories of employees and determine work of equal value. This structure helps ensure that comparable roles are remunerated equally. Employees are classified into job groups based on the nature and value of their work, and when establishing this classification and the criteria used, you involve employee representatives.
2. Comply with transparency obligations
The bill imposes various transparency obligations on employers, both towards applicants and employees.
- For applicants: state the salary or salary range in the job advertisement or provide this information in good time and prior to salary negotiations.
- Ban on asking about salary history: you may no longer ask about previous salary. This prevents past inequalities from carrying over.
- For employees: give employees insight into the criteria used to determine pay, pay levels and how someone can progress in pay. Inform employees that they may request information about pay distribution by gender in comparable roles, how this right can be exercised, and be prepared to respond to such requests.
3. Reporting obligation for larger employers
Employers with 100 or more employees must report to the competent authority on the pay gap between men and women within their organisation. The frequency of pay reporting depends on the number of employees in the organisation. The timing of the first report also depends on the number of employees. The information will show whether there are pay differences between men and women within the company and, if so, how large these are and in which areas.
If it appears that the average pay between men and women differs by at least 5% without valid objective and gender-neutral justification, the employer must take corrective measures, such as drawing up an action plan (pay evaluation) in cooperation with the works council or employee representatives. If adjustment of the collective labour agreement is required, trade unions are also involved. The pay evaluation must be available to employees, the works council/employee representatives and the monitoring body. In addition, employees must be informed annually of their right to pay transparency, broken down by gender.
| Employer size | Frequency | First report |
|---|---|---|
|
100–149 employees
|
Every 3 years
|
No later than 7 June 2031 (over 2030)
|
|
150–249 employees
|
Every 3 years
|
No later than 7 June 2028 (over 2027)
|
|
>250 employees
|
Every year
|
No later than 7 June 2028 (over 2027)
|
The timing of the first report for employers with 150 or more employees therefore deviates from the Directive. The Council of State has noted that the Directive does not provide room for a later first reporting date than 7 June 2027, but the Dutch government has not adopted this advice because it considers reporting by that date unfeasible in practice.
4. Analysis
Carry out a pay equity assessment within the organisation on a regular basis to prevent risks and to be prepared for potential claims or requests for information. A pay gap analysis is also advisable without a direct reporting obligation under the legislation, as it proactively identifies inequalities, supports the burden of proof in discussions and strengthens trust among employees.
Looking ahead: from obligation to opportunity
For employers, there is a clear assignment, and an opportunity to place transparency and equal opportunities at the heart of their organisational culture.
By taking transparency and equal pay seriously, you work on trust, satisfaction and retention of staff. Companies with a fair and inclusive culture perform better than competitors. Employees stay longer, are more motivated and feel valued.
A key insight for companies, therefore: closing the pay gap pays off.
Time for action!
Ask yourself whether a pay gap exists within your organisation and assess how large it is.
Then take steps to ensure that you comply with all legal obligations.
Do you need support with this? Would you like to learn more about our services, such as pay gap analysis (Paycheck’ed) or the EUPTD scan? Contact one of our specialists. We are here for you and are happy to help.