The European Pay Transparency Directive came into force on 7 June 2023. The aim of this directive is to promote equal pay for men and women by demanding greater transparency and strengthening enforcement. Although the Netherlands has until 7 June 2026 to implement this directive, postponement is not an option. The impact is significant and requires far-reaching changes in policy, systems and communication. Organisations that do not start preparing now will soon find themselves lagging behind. Failure to comply with the directive can lead to significant financial risks: employees can claim wages for up to five years, including holiday pay, bonuses, statutory increases and interest. In addition, a fine of up to €10,300 per employee may be imposed. The burden of proof lies with the employer, so it is crucial to measure, determine action and document everything properly now.
What does this mean for your organisation?
For all employers:
- Ensure objective and gender-neutral remuneration structures based on criteria such as skills, efforts and responsibilities.
- Adjust your job evaluation systems and remuneration policy accordingly.
- Provide employees with easy access to the criteria for determining pay and pay levels.
- Provide access to the criteria for wage development.
- Upon request, provide written information about:
- the individual wage level;
- the average wage levels per job category, broken down by gender.
- Inform employees annually about their right to information and the steps to exercise this right.
- A mandatory pay review is required if there is a pay gap of ≥5% (without objective justification).
- Ensure that your recruitment policy is adapted: applicants may not be asked about their previous salary. However, objective information must be provided about the starting salary, the salary range and the possibilities for pay development.
- Compensate for any cases of unequal pay now.
Additional obligations for larger employers:
- Employers with at least 100 employees must report periodically on:
- the pay gap and median pay gap;
- the distribution of men and women per pay scale.
- Employers with ≥250 employees report annually; employers with 100–249 employees report every three years.
The role of the works council
The works council plays a key role in the process surrounding equal pay obligations by:
- Monitoring discrimination and promoting equal treatment (Art. 28(3) of the Works Councils Act).
- Right of consent regarding pay structures and job evaluation.
- Actively cooperating with the employer in drawing up an action plan to address unjustified pay differences.
- Monitoring employment conditions information per job group.
- Monitoring compliance and evaluating measures to combat inequality.
Our services
At a time when equal treatment is paramount, our team helps you with strategic, practical and legally sound solutions. We ensure that you gain insight into your pay strategy and support you in drawing up objective, gender-neutral justifications where necessary.
Flyer Equal Pay & Pay Transparency
Our services include:
- Analysis of your payroll data
- Tooling for insight and reporting
- Legal review and advice
- Support with communication (with employees, the Works Council, authorities) and implementation
- Support in resolving identified pay inequalities and disputes arising from them
Together with our strategic partners, we offer a one-stop shop for legal, tax and HR issues relating to pay transparency and compliance.
Would you like to know more or do you want to start preparing for the pay transparency directive?
Our specialists are happy to help. Whether you have questions about the directive, are looking for advice on remuneration structures or want to get started with an action plan, our team is ready to provide you with tailored legal and strategic advice.
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