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The Directive 2023/970/EC (Directive) aims to strengthening the principle of equal pay for equal work between men and women through transparency and enforcement mechanisms. The Directive generally applies to all employers and must be implemented by the member states by 7 June 2026.
To that purpose, the Netherlands’ government has published a draft Bill for consultation on 26 March 2025. After consultation, it is expected that the Bill will be sent to the Council of State for advice and subsequently it will go through Parliamentary deliberations.
Although it is still a draft, the Bill provides a helpful insight in how the Directive will take shape in the Netherlands. In this blog, we will provide an overview of the draft Bill.
The proposed implementation law in the Netherlands
The draft Bill, which is currently under consultation, amends the existing Equal Treatment of Men and Women Act, as well as the Works Councils Act (WCA or: WOR) and the Labor Allocation Act by Intermediaries (Waadi).1 The Dutch government decided not to include any additional measures in the draft Bill other than those strictly necessary for implementation of the Directive. This is in line with the government’s standing policy in dealing with EU legislation.
The draft Bill contains the following measures:
1. Pay structures
Employers must have objective gender-neutral pay structures for equal work or work of equal value, so that workers can be categorized on that basis.
The employer determines the objective and gender-neutral criteria on which the pay structure is based, such as skills, effort, responsibilities and working conditions, and any other conditions that are relevant to the job or position (such as educational requirements or behavioral skills).
2. Transparency obligations
Before hiring
Employers must provide information to job applicants about the initial pay (or its range) of the job position and, where relevant, details of the provisions of the collective labor agreement (CLA) applied by the employer in relation to the position.
Employers may not ask job applicants about their current or previous pay (even when hiring internally).
Though this obligation is already included in current legislation, employers must also ensure that vacancy notices and job titles are gender-neutral and recruitment processes are non-discriminatory.
During employment
Employees have the right to request (directly or through their workers’ representatives or national equality body) information on their individual pay level and the average pay levels, broken down by sex, for categories of workers performing the same work as them or work of equal value to theirs. This information must be provided to said employee within two months the request is made.
Employers should provide workers with easy access to the objective, gender-neutral criteria that are used to determine their pay and pay levels. If an employer has 50 or more employees, they should also provide workers with easy access to the objective, gender-neutral criteria that are used to determine pay progression.
Employers must inform all their employees annually of their right to request and receive in writing information on their individual pay and average pay levels broken down by sex for colleagues doing the same work or work of equal value.
Employees cannot be (contractually) prevented from disclosing their pay to others.
3. Reporting obligations (applicable to employers with at least 100 workers)
Employers must report to a designated authority and communicate internally on the gender pay gap in the organization. The reporting authority will publish these reports on its website.
Employers must report on the average pay differences within their organization, as well as pay differences between different categories of employees performing equal work or work of equal value. Subordinate legislation will further lay down the pay components that employers will have to report on.
The frequency of reporting and the deadline of the first report depends on the size of the organization:
Number of employees
Frequency of reporting
First report deadline
100-149 employees
Every 3 years
On or before 7 June 2031
150-249 employees
Every 3 years
On or before 7 June 2027
250 or more employees
Every year
On or before 7 June 2027
If the report shows any pay differences that cannot be objectively justified, the employer must take measures to eliminate these differences within a reasonable period. This period depends on the circumstances of each case.
Employers must identify, remedy and prevent discriminatory pay differences by way of a pay evaluation (which comprises an action plan) when (i) their pay reporting reveals a gender pay gap above 5% (ii) that cannot be justified by objective, gender-neutral criteria and (iii) was not tackled within 6 months.
4. Legal enforcement
Employees seeking to enforce equal pay and claim damages must pursue their case in civil court. Several measures have been introduced to enhance the legal protection of workers who claim their right to equal pay in court proceedings:
The draft Bill expands the reference person to base equal pay claims on. When assessing whether workers are carrying out the same work or work of equal value, the comparison will no longer be limited to situations in which the workers work for the same employer but shall be extended to a single source establishing the pay conditions. This can be the case when the employment conditions are laid down in, for example, a CLA that applies to multiple employers. Furthermore, the assessment of whether workers are in a comparable situation shall not be limited to workers who are employed at the same time as the worker concerned.
The burden of proof regarding equal pay claims is shifted to the employer if the employer has not complied with transparency or reporting obligations.
Workers and workers' representatives are protected against any adverse treatment or consequences as a result of exercising their rights in relation to equal pay.
5. Supervisory authority
The National Labor Authority is designated as supervisory and enforcement authority and is able to impose fines on employers in case of a breach (up to €10,300 per breach) or impose an order subject to penalty to ensure non-compliant employers meet obligations.
6. Works council and trade unions
Employers will need to involve the works council and the trade unions (to the extent the relevant matters are regulated in a CLA) in meeting the obligations outlined in the draft Bill.
The works council has a right of consent regarding decisions about social policy (Art. 27 WCA). The draft Bill expands this right of consent. Under the proposed regime, employers must not only seek the works council's consent on any decisions regarding the pay structure and job-grading system, but also regarding:
the objective and gender-neutral criteria on which the employer’s pay structure is based;
the categorization of employees based on equal work or work of equal value;
the way in which unjustified pay differences are remedied; and
the pay evaluation (that employers are required to do if (i) their pay reporting reveals a gender pay gap above 5% (ii) that cannot be justified by objective, gender-neutral criteria and (iii) was not tackled within 6 months), among which a plan of approach to tackle unjustifiable differences in close consultation with the works council.
Additionally, employers are required to provide the works council with information about the employment conditions of various categories of workers (Art. 31d WCA). This information right will be expanded under the proposed regime. Employers must seek confirmation from the works council about the accuracy of the information provided under the new pay gap reporting obligation.
Key takeaways
The Directive and the draft Bill introduce significant changes and challenges for employers in the Netherlands:
Administrative burden
The reporting obligations apply to each employer separately and may not be consolidated. This means that each employer in a group of companies must report and inform on its own pay gaps and pay structures, regardless of the size and location of the parent company or other subsidiaries. It is possible to refer to group pay structures.
Increase in claims
The transparency measures are likely to increase gender equality claims related to pay transparency due to the shift in the burden of proof towards the employer. In addition, employers may also expect a rise in general (non-gender-related) equal pay claims, although the shift in the burden of proof would not apply to this category of claims. Workers will have more access to information and will be better positioned to challenge pay discrimination on any ground, such as age, disability, ethnicity, or religion. Employers will have to ensure that their pay structures and practices are based on objective and gender-neutral criteria and that they can justify any pay differences between workers performing equal or equivalent work. We note that even though pay differences between categories of workers may be justified, this does not mean that an individual claim from an employee is unable to succeed, as courts would assess the circumstances of each case individually to determine whether there is a breach of the rules on equal pay.
Timing
The draft Bill expands the information rights and the right of consent of the works council and/or requires the cooperation of the trade unions in respect to among other things pay structures and gender-neutral criteria to assess the value of work. As these processes can take several months, this could cause a timing issue. In order to be ready by 7 June 2026, employers will need to start preparations timely in advance of that.
The Directive and the draft Bill have implications for all employers in the Netherlands. It is important to stay informed and prepared for the upcoming changes and challenges, especially considering that the draft Bill, if implemented, does not provide for transitional provisions and that the new rules - apart from the reporting obligations - enter into effect immediately after 6 June 2026.
[1] For the purpose of this blog, we will not go into the amendments to the Labor Allocation Act by Intermediaries or other details stipulated in the draft Bill regarding temporary workers.
