EU Directive on Pay Transparency - time to take action

The European Union adopted the Pay Transparency Directive on 10 May 2023: an important step towards ensuring the application of the principle of equal pay for equal or equivalent work for both men and women. The Directive introduces minimum standards and extensive transparency requirements to strengthen equal pay. The Directive applies to all employers and affects all employees with an employment contract. EU member states have until 7 June 2026 to turn the Directive into national legislation. 

The main obligations arising from the Directive are as follows:

1. Wage transparency for job applicants
   Employers must provide information about the starting salary or its range in the vacancy announcement or before the job interview. It is not permitted to inquire about remuneration from present or previous employment relationships. Job vacancies must be worded in a gender-neutral terms.
2. Right to information for employees
   Employees will have the right to request information about the pay scales, subdivided by gender, for categories of employees carrying out the same or equivalent work. This requires gender-neutral systems for job evaluation and classification.
3. Reporting on the wage gap
   Employers with a workforce of 100 or more must publish information about the pay gap between female and male staff.
4. Joint pay review
   In the event of an unjustified pay gap of more than 5% that is not corrected within six months, employers must carry out a joint pay review. This review will also include corrective measures. Employee representatives, such as trade unions and works councils, will play a part in this, which makes it important to properly identify their rights and involvement.
5. Sanctions on employers
   Employees who have been harmed as a result of pay discrimination on the basis of gender will be entitled to compensation. In the event of suspected discrimination, the burden of proof rests on the employer. Employee representatives may act on behalf of employees in legal or administrative proceedings. Sanctions could also include fines. 
    

Current implementation status

The Netherlands announced on 15 September 2025 that it was not feasible to meet the original deadline of 7 June 2026 and postponed its implementation until 1 January 2027. However, on 18 December 2025 the European Commission officially responded that all member states, including the Netherlands, had until June 2026 at the latest to turn the Directive into national legislation. This means that the reporting requirements will already apply for 2026. 

The Commission emphasised the importance of this Directive in ensuring equal pay between men and women for the same or equivalent work and remains committed to its timely and proper implementation.

Start preparing today

Although the objective of the EU Directive is clear, compliance requires careful preparation, with structure and commitment on the part of employers. Don’t wait until the Directive has been fully converted into national legislation but start now with the following steps:

1. Draw up an equal pay action plan.
2. Carry out a wage analysis (possibly as a test) to identify risks and determine corrective measures.
3. Review your job structure and ensure that job evaluation and classification are gender neutral.
4. Check existing contracts, policy and procedures and make sure that all the data is up-to-date and accessible.
5. Draw up a framework for cooperation on equal pay with employee representatives.
6. Set up a streamlined procedure for employees’ right to salary information.
7. Develop communication strategies to manage internal and external expectations.
8. Put the topic of equal pay on the agenda and train your managers, HR professionals, employee representatives and talent teams.

Make sure that you are well prepared to meet all transparency obligations under the Directive before focusing on the reporting requirements. This only applies to employers with a workforce of 100 or more. Not just in the Netherlands but all other EU member states in which you operate, too. Start in time to avoid unwelcome surprises later.