EU pay transparency directive: how Dutch employers can prepare for 2026

The clock is ticking.

The EU Pay Transparency Directive (the “Directive”), adopted in May 2023, introduces sweeping changes aimed at narrowing the gender pay gap across Europe. The new rules impose transparency requirements, employee information rights, and formal reporting obligations. Employers who fail to comply may face enforcement by the Dutch Labour Inspectorate — as well as litigation under a reversed burden of proof.

With a transposition deadline of 7 June 2026, Dutch employers have limited time to act.

In brief – what you need to know

• The Directive applies to all employers, including those using agency workers or payroll constructions.
• Transparent, objective, and gender-neutral pay structures are required — including documented criteria such as skills and responsibilities.
• Employers with 100+ employees will face new reporting obligations (first deadline: 7 June 2027).
• Job applicants must receive salary range information before interviews.
• Works councils play a critical role, particularly in pay assessments and corrective measures.
• Failure to comply may result in fines of up to €10,300 and a reversal of the burden of proof in legal proceedings.

Scope of the Directive

The Directive (and the Dutch draft implementing legislation: Wet implementatie richtlijn loontransparantie mannen en vrouwen) applies to all public and private employers in the Netherlands, covering any form of employment relationship.

This includes:

• Part-time employees
• Fixed-term workers
• Temporary agency workers
• Payroll employees
• Employees in managerial positions

Important: Interns engaged under an internship agreement are excluded. However, independent contractors may be covered if their agreement qualifies as an employment relationship under Dutch law.

Key Requirements for Employers

1. Pay structures

Employers must implement a transparent pay structure based on at least four core, gender-neutral and objective criteria:

• Skills
• Effort
• Responsibilities
• Working conditions

Employers must define job categories that represent “work of equal value”, even if roles differ. These categories must be developed in cooperation with employee representatives (typically the works council), and criteria may be weighted based on relevance to each role. Employers may also include additional objective factors, such as educational background or experience.

Importantly, soft skills must not be undervalued in pay determinations.

2. Transparency obligations

At hiring stage:

• Job applicants must be informed of the initial salary or salary range prior to the interview.
• Contrary to the Directive, the Dutch draft legislation does not require this to be published in the job posting.

During employment:

• Employees must be informed of the criteria for salary levels and progression.
• Employers with fewer than 50 employees are exempt from publishing salary progression criteria.

Information requirements:

• Employees may request:
  • Their own salary information
  • Average salaries by sex for employees doing the same or similar work
  • Employers must respond within two months and inform all employees annually of their right to request this information.

3. Reporting obligations

Employers with 100 or more employees must submit reports on gender pay differences (both fixed and variable pay). The report must be confirmed by management in consultation with the works council and made available internally to employees. A central monitoring authority will publish the general results online.

Definition of ‘Employer’:

The law follows the definition of “enterprise” under the Dutch Works Council Act. Reporting is based on economic and organizational reality, not strict legal structures. If a group of entities operates as a single business and shares a works council, one consolidated report may suffice.

4. Joint pay assessments

If a gender pay gap exceeding 5% is found within a category of employees and cannot be objectively justified, the employer has six months to correct it. If not, a joint pay assessment must be conducted with the works council.

Key elements:

• A plan of approach must be submitted and approved by the works council.
• Results must be shared with the works council, employees, and the monitoring authority.
• Corrective measures may impact pay structures or job classification and must be co-determined.

Role of the Works Council

The works council plays a central role in implementing the Directive:

• Defining pay structure criteria
• Participating in joint pay assessments
• Approving changes that impact job classification

  Remedies and Enforcement

• Compensation: Employees who experience pay discrimination can claim full back pay, including lost bonuses and benefits.
• Burden of proof: If the employer fails to meet transparency obligations, the burden shifts — the employer must prove that discrimination did not occur.
• Exception: Only if the employer shows the violation was minor and unintentional, the burden of proof remains with the employee.
• Labour Inspectorate: Can impose fines of up to €10,300 per violation (2024 level).

What should employers do now?

Although the first reporting deadlines start in 2027, other obligations — such as pay transparency and employee information rights — take effect as of 7 June 2026. Preparation should begin now.

Recommended actions:

1. Review pay structures

   Identify gaps, especially >5%, and document your pay criteria

2. Engage the works council   

   Align on the evaluation criteria and prepare for joint responsibilities

3. Implement transparent processes

   Make it easy for employees to request salary comparisons and progression paths

4. Audit your recruitment materials

   Ensure job postings and interviews meet transparency requirements

Need help? Happy to assist!

If you have questions about the Pay Transparency Directive or the Dutch implementing legislation — or want support designing compliant pay structures — please don’t hesitate to reach out to our Amsterdam based partner Maria Benbrahim or other employment team members.

Authored by Maria Benbrahim and Lars Roelofsen.