By 7 June 2026 at the latest, the EU Pay Transparency Directive must be transposed into national (Dutch) legislation. This means that, from the date of transposition, the Directive will apply in the Netherlands. Although 2026 may still seem far off, it may be necessary for employers to take measures before the law takes effect, to limit administrative burden and prevent negative consequences.
The duty of pay transparency was initially introduced to counter potential pay discrimination between men and women. Employers with more than 100 employees will have to comply with this duty. Pay transparency will not only apply in the workplace, but is also important during the recruitment process.
What is pay transparency?
From 2026, employees will be able to ask their employer for transparency about the pay of other employees in the same or a similar role. “Pay” also includes any bonuses, a company car, and other allowances. The employer must, moreover, be able to demonstrate how it arrived at a particular level of pay. This allows the employee to compare pay based on pay levels as well as company reports. In these reports, companies are required to report on the pay gap between men and women within the organisation. If an employer refuses an employee’s request for pay transparency, this can result in a fine.
Consequences
If pay discrimination is found to exist, employees who are victims of pay discrimination based on sex can be compensated with, at a minimum, full payment of outstanding wages and any related bonuses or payments in kind. The employee can also claim damages for non-material harm, such as missed opportunities. Discrimination on the grounds of ethnicity, religion, and sexual orientation is also covered by the Directive.
What can employers do now?
First, it is wise to identify the grounds on which employees’ pay has been set differently. If there is no objective ground for this, it means, in practice, that the pay policy allows for unequal pay and will therefore need to be adjusted. Employers can already take the following steps:
Tightening job classifications
It is advisable for employers to maintain clear job descriptions and categories. The criteria and evaluation of a role must be defined as clearly, objectively, and neutrally as possible, so that they bear no relation to sex.
Pay transparency
It is advisable to create insight into the pay structure and pay differences by gathering this information in one central place. Only once all information is centralised can the employer identify where and to what extent pay inequality exists, and ensure that any pay differences relate to working conditions rather than sex. The pay scale must correspond to the weight of the role.
Do you have questions about the pay transparency duty within your organisation? Please feel free to contact our employment lawyers.
