The gender pay gap remains a persistent issue in the Netherlands. In 2023, women earned on average 10.5% less per hour than men. Across the European Union, that figure stands at 12%. To address this, the EU Pay Transparency Directive has been adopted at the European level. By June 2026, all member states must have transposed the directive into national legislation. The goal: to make equal pay for equal or equivalent work enforceable. The only question is—how?
“Most employers agree with the principle,” says Jannes van der Velden, spokesperson for the employers’ association AWVN. “But there is much more debate about how it should be implemented.”
What will change in practice?
The EU directive introduces several fundamental changes. The key provisions of the proposal by the Dutch Ministry of Social Affairs and Employment include:
- Salary transparency during recruitment: Job advertisements or interview processes must clearly state the starting salary or salary range.
- Ban on asking about previous salary: Employers may no longer ask applicants about their salary history.
- Freedom to discuss pay: Employees must be free to talk about their salaries without contractual restrictions.
- Right to pay information: Employees will be entitled to information on average pay levels per job category, broken down by gender, and on the objective pay criteria used.
- Reporting obligations: Companies with more than 100 employees must regularly report on internal pay disparities. For firms with 250+ employees, this is required annually; for those with 100–250 employees, every three years.
- Action on unexplained pay gaps (>5%): If a gap of more than 5% is found and cannot be objectively justified, the company must take corrective measures within six months, in consultation with the works council.
- Legal remedies and compensation: Individual employees may challenge pay inequality up to five years retroactively and claim back pay. The burden of proof lies with the employer.
Concerns over bureaucratic burden and feasibility
Although the directive’s objective is widely supported, employers are critical of its complexity and practical implementation. VNO-NCW and MKB-Nederland support the directive “in principle,” but point out that the rollout could bring substantial administrative burdens:
“The proposal requires complex calculations and data reports that don’t always contribute to the actual goal,” they wrote in their consultation response.
“Companies will need to overhaul their systems, yet many aspects remain unclear. That makes the June 2026 implementation date unfeasible for many organizations.”
They therefore advocate a “soft landing”: a transitional period without penalties.
According to Mieke Ripken, spokesperson for VNO-NCW, companies must be able to compare and evaluate equivalent roles. “That demands a structured job classification and valuation system—something many organizations don’t yet have,” she notes. Moreover, historical data must be documented, such as salary increases, bonuses, and the reasons behind them.
Uncertainty around enforcement and sanctions
There is also considerable uncertainty about enforcement mechanisms. The Dutch Labour Inspectorate is expected to oversee compliance. Fines and penalty payments for non-compliance may also be made public, raising concerns over reputational damage.
AWVN stresses that numbers don’t tell the full story. “Gross pay data can paint a misleading picture,” says Jannes van der Velden. “Net differences are often much smaller, and not all justifications are visible in standard reports.”
The Regulatory Pressure Advisory Board (ATR) is also critical. In its evaluation, the board states that it remains unclear whether the expected social benefits will outweigh the high administrative and legal burdens. The board advises further research and a more robust substantiation of the directive’s effectiveness.
Despite the challenges, pay transparency can also be a catalyst for positive change. A fair and well-structured compensation policy supports an inclusive company culture, enhances employee engagement, and strengthens employer branding.
