31 Mar '25
Equal pay for men and women has been a key focus for legislators and employers for years. The new European Pay Transparency Directive introduces concrete obligations for employers. What does this mean for your organization? And how can you ensure compliance with the new requirements?
While the Directive may seem new, it is already unlawful to differentiate pay based on gender — equal work must be equally compensated. The main changes introduced by the Directive involve enhanced rights for employees and job applicants, as well as additional administrative obligations for employers.
European directives must first be transposed into national legislation. The Netherlands is currently in the process of doing so, with a deadline for implementation set for June 7, 2026. A draft bill has been published recently for an online consultation (available in Dutch here).
One of the most significant changes is the requirement to disclose salary information during recruitment. Job postings, which must be gender-neutral, must now include an indication of the salary level or pay scale. This ensures transparency for job applicants, preventing them from only learning about salary details later in the process. Additionally, employers will no longer be allowed to ask candidates about their previous salaries, preventing past pay inequalities from perpetuating.
Within organizations, pay structures must also become more transparent. Employees will have the right to access the criteria on which their salary, salary scales, and potential salary progression are based. Employers must therefore develop a clear and well-documented remuneration policy that is accessible to all employees. Vague or ambiguous salary criteria will no longer suffice; where necessary, employers will need to adopt gender-neutral and objective job evaluation systems. Please note that any changes to a job evaluation system require prior approval from the works council.
For larger organizations, the Directive introduces an additional requirement: periodic reporting on pay disparities. Companies with 100 or more employees must provide insights into the gender pay gap within their organization. For companies with 250 or more employees, an annual reporting obligation will apply.
Employers who fail to comply with these obligations risk sanctions such as fines and compensation claims from affected employees. Additionally, they may be required to make retroactive salary adjustments. If a pay disparity of more than 5% is identified and cannot be objectively justified, the employer must collaborate with employee representatives (such as a union or works council) to develop an action plan to address the issue. Furthermore, non-compliance may result in reputational damage.
Employees will gain stronger legal protections. Consider a scenario where Lisa and Tom both work as marketing specialists at the same company. They have comparable backgrounds and experience and perform equally well. However, Lisa earns 8% less than Tom without any objective justification. Under the new Directive, Lisa has the right to access the company’s pay structure. She can also claim compensation for the salary she was unfairly denied.
The burden of proof is reversed in such cases: if Lisa presents evidence suggesting unequal pay, it is up to her employer to prove that no pay discrimination has occurred. This principle already applies under current law, as demonstrated in a recent case where an employer failed to justify a €1,000 pay gap between a male and female corporate lawyer (ruling available in Dutch here).
How can employers prepare? First and foremost, remember that gender-based pay discrimination is already illegal and can lead to legal claims. There is no reason to wait until 2026 to start closing the gender pay gap.
Employers should begin by conducting a thorough review of their pay policies. Are there unexplained pay disparities? Are salary criteria clear and objective? How are job applicants assessed? Ensuring that this information is well-organized and easily shareable with employees and the works council is crucial. Training for HR teams, recruiters, and managers is essential to ensure they are well-informed about the new obligations. In the long run, investing in software solutions to monitor and report pay data can also be beneficial.
In short, there is work to be done. Questions? Our Employment Law team is happy to assist you.
03 Apr 25
28 Mar 25
20 Mar 25
20 Mar 25
12 Mar 25
06 Mar 25
27 Feb 25
26 Feb 25
24 Feb 25
21 Jan 25
16 Jan 25
Met uw inschrijving blijft u op de hoogte van de laatste juridische ontwikkelingen op dit gebied. Vul hieronder uw gegevens in om per e-mail op te hoogte te blijven.
Stay up to date with the latest legal developments in your sector. Fill in your personal details below to receive invitations to events and legal updates that matches your interest.
Follow what you find interesting
Receive recommendations based on your interests
{phrase:advantage_3}
{phrase:advantage_4}
We ask for your first name and last name so we can use this information when you register for a Ploum event or a Ploum academy.
A password will automatically be created for you. As soon as your account has been created you will receive this password in a welcome e-mail. You can use it to log in immediately. If you wish, you can also change this password yourself via the password forgotten function.
