The Dutch government recently published draft legislation aimed at implementing the minimum standards under the European Union Pay Transparency Directive (Directive (EU) 2023/970, the “Directive”) by 7 June 2026.
Background
The Directive requires EU member states to adopt measures to enhance gender pay equity, meeting at least the minimum standards outlined in the Directive (see Lockton article here (opens a new window) for more details on the Directive and creating a roadmap for compliance).
The Netherlands has opted for a minimal implementation strategy in the draft bill (the “Bill”), incorporating only the minimum requirements to comply with the Directive without additional national requirements. The underlying principle of the Bill is to ensure women and men receive equal pay for equal or equivalent work.
The Bill was released on 26 March 2025 for public consultation, which concluded on 7 May 2025. As the Bill still needs to be considered and approved by both the House of Representatives and the Senate, it remains subject to amendments. The Dutch government intends to implement the Directive by 7 June 2026, which is the deadline set by the Directive.
Key details
Key details for employers to note include the following:
Definition of “pay”
The Bill adopts the Directive’s broad definition of “pay,” which includes all remuneration paid by the employer to the employee for their work. This encompasses the basic salary, any supplementary or variable components, as well as all forms of employee benefits. As a result, employers will need to identify and measure all benefits provided to employees.
The Netherlands is expected to issue further regulations clarifying specific types of supplementary or variable components to be included in “pay.”
Pre-employment
Employers would be required to provide information to job applicants on the starting pay or pay range, which should be determined based on objective and gender-neutral criteria, during the recruitment process (e.g., job listings, before interviews, when offering the job position). This information would need to be provided in such a way that informed and transparent negotiations on pay can be conducted.
Employers would no longer be able to inquire about current or previous salaries.
All employers, regardless of size, would need to comply with these pre-employment obligations.
Pay structures
A key concept under the Directive, to respect the right to equal pay, is the categorization of employees that carry out equal or equivalent work through the establishment of pay structures.
In line with the Directive, the Bill proposes that all employers, regardless of size, must establish pay structures to determine the categories of employees that carry out equal or equivalent work. These pay structures must be based on objective and gender-neutral criteria that are relevant to the job function and minimally include skills, effort, responsibilities and working conditions. Any relevant behavioral skills should not be undervalued.
The Ministry of Social Affairs and Employment is expected to develop methods and tools to support employers in establishing these pay structures.
Employee rights
The Bill does not go beyond the minimum provisions set out in the Directive. Once the Bill is passed, employees will be entitled to the following rights:
All employers will be required to provide employees with easy access to the criteria used to determine their pay and pay levels.
For employers with at least 50 employees, employees must also have access to the criteria used to determine pay progression. The Directive permits EU member states to exempt employers with fewer than 50 employees from this requirement, and the Netherlands has chosen to implement this exemption.
All employees will have the right to request written information on their individual pay levels and the average pay levels, broken down by gender, of the employee’s category of employees performing equal or equivalent work. The information must be provided by the employer within a reasonable period, and within two months, at the latest, of a request. Employers must also notify employees annually of this right and the steps to exercise it.
All employers would not be allowed to prevent employees from disclosing information on their wages for the purpose of applying the principle of equal pay. Employers would also not be permitted to penalize employees or their representatives for exercising rights to equal pay.
These employee rights, except for the right to access criteria for pay progression which only applies to employers with at least 50 employees, would apply to all employers, regardless of size.
Pay gap reporting obligations
The Netherlands currently imposes no pay gap reporting obligations on employers. The Bill proposes meeting the Directive’s minimum standards on pay gap reporting obligations, which would depend on the number of employees (including full-time and part-time employees, as well as temporary workers provided through employment agencies):
Number of employees | Reporting frequency | First report due date |
250 and above | Every year | 7 June 2027 (for 2026 data) |
150 – 249 | Every three years | 7 June 2027 (for 2026 data) |
100 – 149 | Every three years | 7 June 2031 (for 2030 data) |
Notably, the Netherlands has chosen not to impose reporting obligations on employers with less than 100 employees. However, these employers may report at their own discretion.
Employers would be required to report the following information for the previous calendar year:
the pay gap
the pay gap in additional or variable components
the median pay gap
the median pay gap in additional or variable components
the proportion of female and male employees receiving additional or variable components
the share of female and male employees in each quartile pay scale (i.e., the scale in which employees are divided into four equal groups according to their wage level, from low to high)
the pay gap between employees, broken down by categories of employees and by basic pay and additional or variable components
This information would be reported by employers electronically to a regulatory authority, which will publish the data on a national public website. The specific means of electronic reporting, the designated regulatory authority and format of publication are expected to be detailed in implementing regulations which have not yet been issued. Employers are not required to publish the information on their own websites, although they may choose to do so voluntarily.
Additionally, employers would also be obligated to inform employees of the pay gap between employees, broken down by categories of employees and by basic pay and additional or variable components. If requested by an employee:
The employer must provide this information, if available, for the previous four years.
The employer must, within a reasonable period of time, clarify, specify and explain any pay gap, justifying the information provided.
The Bill expressly sets out that if any pay gap is not justified based on objective and gender-neutral criteria, the employer shall remedy the difference within a reasonable period of time, which will depend on the specific circumstances. If the pay gap is at least 5% and is not remedied within six months after submitting the report, the employer would then be required to carry out a pay evaluation (see below).
The Bill also provides that further detailed regulations would be laid down on pay gap reporting, including on the specific additional or variable components to be reported and how employers should report the prescribed information to the designated authority.
Pay evaluations (i.e., joint pay assessments)
Employers would be required to conduct a pay evaluation to identify measures for addressing unjustified pay gaps where all the following apply:
The report shows a gender pay gap of at least 5% in a category of employees.
The gap cannot be justified based on objective and gender-neutral criteria.
The employer has not remedied the gap within six months of submitting the report.
Enforcement
In the event of non-compliance, the authorities may take enforcement action, such as requiring the employer to comply within a specific time limit or issuing warnings, fines or penalties.
If a discrimination claim is brought against an employer for non-compliance with a pay transparency obligation, the burden of proof would be on the employer to prove otherwise, or that the breach was unmistakably unintentional and minor. Even if an employer is successful in the claim, the court may order the employer to pay the employee’s costs if it considers that the employee had good reason to bring the claim and that such an order is appropriate.
Works councils
In the Netherlands, employers with at least 50 employees are required to establish a works council, an employee representative body that is consulted on workplace decisions and employee interests. Under Article 27 of the existing Works Council Act, the works council’s approval is required for every proposed decision to lay down, amend or withdraw certain matters, including “pay or job-grading systems.” Article 27 also sets out procedures for consultation and obtaining such approval.
The Bill proposes replacing “pay or job-grading systems” in Article 27 with “a compensation scheme covering”:
the pay structures/job evaluation system to be adopted
the objective and gender-neutral criteria used for determining pay structures
the categorization of employees based on equal work or work of equal value
any measures to eliminate unjustified pay gaps
any pay evaluation, including a plan of action to remedy unjustified pay gaps in close consultation with the works council
The Bill also proposes that employers must request that the works council confirm the accuracy of the information provided under the new pay gap reporting obligations.
Employer action: ACT
As the Bill is still undergoing consideration and has yet to be passed, employers should monitor the legislative process. Additional regulations are also expected to be drafted to implement certain provisions of the Bill.
While employers may opt to wait until the Bill is implemented before establishing specific protocols, this will leave little time to act. Employers are strongly recommended to develop a roadmap as soon as possible outlining the steps needed to prepare for compliance, especially any steps involving the consent of works councils. Possible actions employers can start taking are set out in the Lockton article on the Directive here (opens a new window).
If the Bill changes materially or passes, the Lockton Global People Solutions Compliance Practice will update this article accordingly.
Further Information
