EU Pay Transparency: European Commission Rejects postponement
19/12/25
On 18 December, the European Commission made it clear that the Netherlands' request to delay the EU Pay Transparency Directive won't be accepted. All member states are expected to have this directive in place by June 2026. The Commission stresses the importance of pay transparency for achieving equal pay between genders and cautions that delays could lead to infringement actions.
Previously, on 15 September 2025, a report from the Informal Council on Employment and Social Policy was published, stating that more time was needed for the Dutch implementation law (Wet implementatie Richtlijn loontransparantie mannen en vrouwen) of the EU Pay Transparency Directive. The new expected implementation date will be 1 January 2027.
The Netherlands hasn't yet responded to the Commission's decision, but this could mean that the reporting requirement for employers with 150+ employees might apply to the 2026 calendar year, with reporting due in 2027.
It is essential to act proactively and thoroughly review and address any pay disparities within your organisation, so you are not confronted with the obligation to disclose unjustified pay gaps.
What does this mean for your organisation?
Pay transparency is rapidly becoming a central topic for employers across Europe. With the introduction of the EU Pay Transparency Directive, all organisations, regardless of size, industry or structure, are facing new obligations to ensure equal pay for equal work and to correct unjustified pay gaps. This article outlines the key requirements of the Directive including the Dutch implementation law and highlights what employers need to do now to comply and foster a more transparent and equitable workplace.
Transparency obligations: all employers
The Directive introduces several transparency obligations that apply to all employers, regardless of the number of employees. These obligations are summarized below. All employers must have their processes reviewed to be compliant per June 2026.
Before employment
Employers must ensure that job vacancies and job titles are gender-neutral and that recruitment procedures are conducted in a non-discriminatory manner.
Employers must proactively inform applicants about the starting salary or the salary range during the application process.
Employers are no longer permitted to ask applicants about their previous salary.
During employment
Employees have the right to information about how the companies’ remuneration policy is structured and how salaries develop over time. This solely applies to employers with 50 employees or more.
Employees may request written information on their remuneration. They are entitled to receive:
- their own individual remuneration, and
- the average pay levels by gender for categories of workers performing the same or equivalent work.
Employer obligations regarding the right to information
Inform all employees once a year about the right to information and how it can be exercised.
Provide the information ultimately within two months of the request.
Report total remuneration (base salary plus fixed or variable components) as an average annual salary per category. A breakdown per component is not required; an hourly rate may be added voluntarily.
Ensure the information is up to date.
Providing this information is not considered a breach of the data protection rules under the General Data Protection Regulation. Even if averages in small groups indirectly reveal an identifiable colleague’s pay, disclosure remains lawful.
Reporting obligations: employers with more than 100 employees
Employers with 100 or more employees are required to provide insight into the average and median pay gap levels between men and women within their organisation, including base salary and any additional or variable compensation. Employers are required to provide reports on gender pay gap to the board, the works council, to the wider public through a publicly accessible digital place and the labour inspection.
The introduction of the reporting obligations is phased based on employer size:
- 100 to 149 employees: every three years, first report by 7 June 2031
- 150 to 249 employees: every three years, first report in 2027 (over calendar year 2026)
- 250 employees or more: annually, first report in 2027 (over calendar year 2026)
The report should include:
Gender pay gap fixed salary
Gender pay gap in complementary or variable remuneration components
Median gender pay gap fixed salary
Median gender pay gap in complementary or variable remuneration components
Proportion of female and male workers receiving complementary or variable remuneration components
Proportion of female and male workers in each quartile pay band
Gender pay gap between workers by categories of workers broken down by fixed salary and complementary or variable remuneration components.
Corrective measures
If there is a pay gap and this cannot be objectively justified based on gender neutral criteria, the employer must take corrective measures to address these differences. The works council must approve these measures.
And if the (unjustified) pay gap is 5 per cent or more within a category of functions and this is not resolved within six months, a pay evaluation is mandatory. This involves an analysis in cooperation with the works council that must result in an action plan. The action plan should outline the causes and solutions for closing the pay gap.
Non-compliance may result in administrative penalties. For employers with 250 or more employees, fines can exceed 10,000 euros, with the possibility of higher penalties for repeated violations.
Background
In 2023, the European Union introduced the Pay Transparency Directive to address the ongoing inequality in pay between men and women. The main objective of this Directive is to promote equal pay for equal or equivalent work and to reduce the gender pay gap.
Despite progress in the position of women in the labour market, significant wage disparities and pension gaps between men and women still exist. In 2024, the gender pay gap in the EU remained around 13 per cent. The Directive seeks to make these issues more visible and to resolve them by establishing binding obligations and minimum standards designed to strengthen compliance with the principle of equal pay. These obligations and standards consist of transparency obligations, formal reporting obligations, information rights of employees and participation rights.
Implementation
The Netherlands is required to transpose the Directive into national legislation ultimately in June 2026 but has postponed implementation till 1 January 2027. However, the European Commission has indicated that it will not accept any postponement. As part of this process, the Dutch government published a draft bill in March 2025 that provides further elaboration on the Directive, followed by an official consultation round that was concluded in May 2025.
The Dutch legislature has chosen for a ‘1:1 implementation’ of the Directive, meaning that the proposed law closely aligns with the text of the Directive and includes only the elements that are essential to fulfil the implementation obligation. This means that under Dutch law it is aimed to minimize the increase in (administrative) burden for employers as much as possible.
This implementation will be carried out through amendments to existing Dutch legislation, primarily the Equal Treatment of Men and Women Act (in Dutch: ‘Wet gelijke behandeling van mannen en vrouwen’), which already forms the foundation for equality in the workplace. In addition, the Works Councils Act (in Dutch: ‘Wet op de ondernemingsraden’, hereinafter: WOR) and the Allocation of Workers by Intermediaries Act (in Dutch: ‘Wet allocatie arbeidskrachten door intermediairs’) will be amended to clarify the role of employee participation bodies and the position of temporary agency workers within the scope of the new transparency rules.
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