Introduction Women’s labour market participation has increased in recent years, and thankfully women are becoming more and more economically independent. However, there is still no equality between men and women in the labour market. Although the right to equal pay for work of equal value has been enshrined in law for decades, there remains a difference in average pay between men and women in the Netherlands and a (smaller, yet persisting) gap in pay for equal work (source: CBS).
One of the main reasons for the persisting ‘gender pay gap’ is the lack of transparency within organisations. Many employers still do not provide insight into pay differences between men and women. This makes it difficult – and sometimes impossible – for female employees to find out whether they are being paid the same as their male colleagues for equal or equivalent work.
The new transparency obligations bring significant administrative and financial consequences for employers. Non-compliance can result in fines from the Labour Inspectorate, and employees can claim compensation for back pay. In this two-part series, Projective Group and QBiDD Advisory combine their expertise to provide you with an overview of the new legislation and its impact on your organisation. We will cover:
what the obligations are;
which parts of your organisation will be affected;
what is required to become compliant; and
how we can support you.
Today, Part 1: the new legislation, what it means for your organisation, and the role we can play in supporting you.
New Legislation as of 7 June 2026
From 7 June 2026, major changes will take place for employers in the Netherlands. New legislation will come into effect based on a European directive ((EU) 2023/970), aimed at ensuring equal pay between men and women by requiring greater salary transparency (the proposal refers to “pay structures”) and by making pay systems more transparent and objective. Employers – particularly HR and Finance departments – still seem insufficiently aware of the urgency and impact of the new legislation.
Does this Apply to Me?
The Pay Transparency Bill applies to all employers, regardless of sector or size. Agency workers also fall within its scope. Whether your employees work full-time or part-time, on a permanent or temporary basis, and whatever their role – the legislation applies to everyone.
For organisations with 100 or more employees, additional reporting obligations apply. These reporting obligations will be introduced in phases. The other obligations (outlined below), such as transparency around pay criteria and the right of employees to salary information, will apply from the date of entry into force.
Transparency of pay structures
Salaries must be based on objective, gender-neutral criteria (including skills, effort, responsibilities, and working conditions).
Job titles and recruitment processes must be free from discrimination.
Starting salary or salary range must be shared prior to hiring.
Candidates may not be asked about their previous salary.
Right to salary information for employees
Employees have the right to receive written information about their own salary and the average salary of colleagues in comparable roles, broken down by gender.
Employers must inform staff about this right on an annual basis.
Reporting obligations (from 100 employees)
Periodic reporting on the gender pay gap, including:
Base salary and any additional/variable components.
Median gender pay gap.
Proportion of men/women per pay scale.
Explanation of any differences that cannot be objectively justified.
Correction of unjustified pay differences
Any unjustified pay difference must be corrected within a reasonable timeframe.
For differences ≥ 5% without an objective explanation: a mandatory pay evaluation with the works council/trade union and an action plan is required.
Sanctions for non-compliance
Civil law: compensation, overdue pay including interest, and secondary employment benefits.
Administrative law: fines of up to €10,300 per employee, publicly disclosed by the Labour Inspectorate.
Role of the works council
Approval rights regarding pay structures.
Insight into the assessment methodology and the report prior to submission.
Active involvement in evaluating and correcting pay differences.
What are the obligations? All employers will now be required to be transparent about how salaries are determined. This requires a pay structure that evaluates employees not based on job titles or roles but on the actual value of their work. Such a structure must rely on objective and gender-neutral criteria—such as skills, effort, responsibilities, and working conditions—so that work of equal value is paid equally. Additional factors, such as education and experience, may only be considered when demonstrably relevant to the role.
This begins at recruitment: starting salaries or pay ranges must be shared before hiring, and it is no longer permissible to ask candidates about their previous salary. Job titles must be gender-neutral, and the recruitment process must be free from any form of discrimination. Salary negotiations remain possible, meaning pay differences for equivalent roles may still occur, but the final salary must be objectively justified—for example, based on years of experience or performance achievements.
Once employed, employees have the right to receive written information about their own pay and the average pay of colleagues in comparable roles, broken down by gender. If this information is incorrect or incomplete, the employer must provide clarification within two months of the initial request.
Employers must also inform their staff annually about this right and how to exercise it. Organisations with 50 or more employees must additionally be transparent about the objective and gender-neutral criteria used for determining pay and pay progression.
For larger organisations (100+ employees), a reporting obligation applies. These employers must periodically report on the gender pay gap within their organisation. The information must be published on a public website.
Aantal werknemers
Rapportageplicht
Frequentie
< 100 Employees
Not applicable
Not applicable
100-149 Employees
By 7 June 2031
Every 3 years
150-249 Employees
By 7 June 2027
Every 3 years
≥ 250 Employees
By 7 June 2027
Annually
The report must also be provided to employees, broken down by employee categories. Upon request, the employer must clarify the report and explain any pay gaps within a reasonable timeframe. If the employer cannot justify pay differences of 5% or more using objective and gender-neutral criteria, or cannot resolve these differences within six months, a pay evaluation must be conducted with the works council or trade union. This evaluation must produce an action plan outlining causes and solutions for pay gaps, which must also be shared with employees and the monitoring authority.
The works council is given a clear role in the reporting obligation: it must have prior insight into the assessment methodology and be involved in shaping the content of the report before submission. The council’s approval rights are also extended: employers must now seek approval for proposed decisions regarding the objective, gender-neutral criteria underlying the company’s pay structure. It is important not to delay this process, as engagement with the works council can be time-consuming.
All the rules above apply not only to base salaries but also to any additional or variable pay components. Employers cannot circumvent pay transparency legislation through bonuses, allowances, or other benefits.
How can we help? The Pay Transparency Act is more than a new compliance requirement—it represents a significant step toward actively reducing the gender pay gap, increasing workplace transparency, and fostering fairness and trust within organisations.
By investing in pay transparency now, organisations not only reduce the risk of fines and compensation claims but also build a future-proof workplace where equality and integrity are central. At the same time, the new rules present substantial administrative and financial challenges. With stricter enforcement and the burden of proof shifting to employers, timely and accurate compliance is essential to avoid penalties and claims.
With less than ten months until the implementation deadline, this is the ideal time for companies to introduce robust, automated processes to facilitate compliance and promote transparency. Organisations that prepare early avoid last-minute operational risks and gain significant internal efficiency benefits while enhancing their reputation as transparent and fair employers.
Complying with the new legislation requires a careful approach: from systematic analysis and strategic communication to specialised tools. Most organisations do not employ dedicated compensation professionals who can handle such a project “on the side.” Since pay is based on an objective and gender-neutral job evaluation, it is logical that external pay consultants will assist organisations in implementing the legislation.
Specialised software is also available to support both consultants and organisations in collecting and analysing pay data securely. Some solutions go further, enabling pay data to be reported in accordance with the Directive after analysis and any necessary adjustments. These systems can also be configured for employees and managers to easily access the information they are entitled to under the law.
By investing in pay transparency solutions and engaging external expertise, HR and Finance teams can streamline compliance through structured job evaluations, automated reporting, cost analysis, and transparent dashboards for employees and managers alike. We are ready to help you develop and implement a future-proof approach.
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