A transparent pay policy is no longer optional: employers must take action
The legislative framework: five steps for employers
The legislative proposal implementing the Directive in the Netherlands introduces a structured five‑step framework:
Step 1: Pay structures
Every employer must have pay structures in place that ensure equal pay for equal work or work of equal value. This requirement applies to all employers and is subject to approval by the Works Council (OR). The law does not define “pay structures” precisely, but it stipulates that they must include all relevant criteria, such as skills, effort, responsibilities and working conditions.
Step 2: Categorising groups of employees
Employers must determine categories of employees performing equal or equivalent work. This goes beyond job families: different types of work may still be of equal value. The core questions are: “Is the work of equal value? And are there objective, gender‑neutral criteria that justify any pay differences?”
Step 3: Information for applicants and employees
Employers must meet new transparency obligations towards job applicants (such as providing information on pay criteria) and towards employees, who may request insight into the average pay level per employee category, broken down by gender.
Step 4: Reporting obligations for employers with more than 100 employees
These employers must periodically report on the gender pay gap within their organisation. This includes identifying and publishing the pay gap per employee category, the justification for any differences, and additional pay‑related data.
Step 5: Mandatory pay evaluation for unjustified pay gaps ≥ 5%
If a pay gap greater than 5% cannot be justified by objective, gender‑neutral criteria, a joint pay evaluation must be carried out together with employee representatives.
The role of the Works Council (OR)
The Works Council plays a key role in the processes related to equal pay obligations by:
- Safeguarding against discrimination and promoting equal treatment
- Holding approval rights regarding pay structures and job evaluation
- Actively working with the employer to develop an action plan where unjustified pay differences exist
- Reviewing employment‑related information per job group
- Monitoring the implementation and evaluation of measures aimed at preventing inequality
Financial risks of unequal pay
Failure to comply with the new obligations may have significant consequences. A single successful claim regarding unequal pay may trigger a domino effect: upward pay adjustments for groups of employees, retroactive corrections of up to five years, and repayment of wages, bonuses and holiday allowance (in addition to damages and statutory interest).
The supervisory authority may also impose fines of up to €10,300 per employee.
Importantly, the burden of proof lies with the employer. Without transparent pay structures and objective criteria, an employer’s legal position is weakened.
What employers should do now
- Inform employees about the objective, gender‑neutral criteria applied to pay, pay levels and pay progression
- Establish pay structures that meet the statutory requirements, including all relevant criteria
- Determine employee categories performing equal or equivalent work
- Provide, upon request, information on individual pay levels and average pay levels per category, broken down by gender
- Employers with more than 100 employees: prepare for the new gender pay gap reporting requirements
Want to learn more?
On Tuesday, 24 March 2026, we will host a seminar on the Directive and its implications.
If you would like to learn more about the EU Pay Transparency Directive and how your organisation can best design or update its remuneration policy, please contact Lisanne Wigboldus of Pellicaan Advocaten via email or by telephone at +31 (0)88 627 22 20. She will be pleased to assist you.