On 7 June 2023, Directive 2023/970 on strengthening the application of the principle of equal pay for men and women for equal or work of equal value—through pay transparency and enforcement mechanisms (the Pay Transparency Directive)—entered into force. In short, the Directive introduces the following obligations for employers:
i) obligations to ensure equal pay for work of equal value;
ii) pay transparency requirements;
iii) reporting obligations and mandatory pay assessments regarding pay disparities;
iv) measures aimed at ensuring access to justice;
v) measures relating to supervision, enforcement, and monitoring.
Member States were given three years to implement the Pay Transparency Directive into national legislation. This means that national laws should enter into force by 7 June 2026 at the latest. The Dutch government has already indicated that it will not meet this deadline. Based on the Directive, the government has prepared a Draft Bill implementing the Pay Transparency Directive for men and women. Earlier this year, the proposal was submitted to the Council of State for advice, which was issued on 7 April 2026. Following any amendments prompted by this advice, the bill will still need to be adopted by both the House of Representatives and the Senate. The currently envisaged entry into force is 1 January 2027. Large employers (more than 150 employees) will likely be required to report for the first time by 7 June 2028, covering the 2027 reporting year. Employers with 100–149 employees will likely have to report for the first time by 7 June 2031, covering the 2030 reporting year.
In light of the intended entry into force and the extensive obligations introduced by the Directive, it is crucial for employers to begin preparations in a timely manner. Employers will, for example, be required to implement a robust job evaluation and classification system (functiewaarderings- en indelingssysteem). Job evaluations must be based on objective and gender-neutral criteria. Once roles have been evaluated, they must be grouped into categories of equal or equivalent work. Employees will gain the right to request information about their own pay level compared to the average pay level—broken down by gender—for employees performing equal or equivalent work.
In addition, large employers (more than 100 employees) will be required to report on a wide range of pay-related data within the organisation. This includes the gender pay gap, the proportion of male and female employees receiving complementary or variable pay components, and pay differences between employees, broken down by job categories as well as by base salary and additional or variable components.
It is therefore essential that employers start their preparations in a timely manner by implementing a job evaluation system—or, if such a system is already in place, to assess whether the evaluation and classification methods comply with the requirements of the Directive. These initial steps will form the basis for defining job categories. It is also important to closely involve the works council in this process, as it has co-determination rights with respect to: i) the adoption of the job evaluation system; ii) the establishment of objective and gender-neutral evaluation criteria; and iii) the classification of employee categories.
Given the information and reporting obligations (the latter applying only to employers with more than 100 employees), it is also important for employers to map out all components of remuneration within the organisation (such as various allowances). In addition, employers should assess whether differences in base salary or other variable or supplementary pay components between employees performing equal or equivalent work can be justified on the basis of objective factors. In conclusion, the Pay Transparency Directive introduces a broad range of additional obligations for employers. Preparing for these requirements will require a significant administrative effort. It is therefore advisable to begin preparations well in advance. Should you have any questions about the impact