NL: Bill on the implementation of the Wage Transparency Directive for men and women

 

On 7 June 2023, the European Wage Transparency Directive entered into force. Member States of the European Union, including the Netherlands, must implement this directive in their own legislation. The intention is to regulate this implementation by means of the bill ‚Implementation of the Wage Transparency Directive for Men and Women‘.

Content of the bill

The purpose of the bill is to promote equal pay for men and women. Despite the fact that it is legally laid down in (among other things) the Equal Treatment of Men and Women Act that they must be paid the same for the same work, in practice it appears that women often still earn less than men. This not only has consequences for the monthly salary, but also for pension accrual, for example.
Often the cause of this unequal pay is that there is too little openness about wages within companies. The bill aims to address this by implementing the following measures and obligations, some of which apply to (large) employers with at least 100 employees and some to all employers, regardless of the size of their organisation:

Transparency obligations:

The bill introduces transparency obligations that will apply to all employers, regardless of the number of employees:
• Applicants should be informed about the salary or the salary range of the position in good time before the wage negotiations. This can be done (for example) by including this information in a published vacancy, but also in the invitation for the interview. In any case, timely is not during the employment conditions interview.
• Applicants may not be asked about their previously earned or current salary. Grading on the basis of the last-earned salary can lead to wage differentials, which in turn perpetuates the pay gap. In particular, if an applicant in the current job is classified too high or too low, this salary does not reflect the relevance of the work experience, as has also been ruled by the Netherlands Institute for Human Rights.
• Employers must have wage structures that guarantee equal pay for equal work. These pay structures should include all criteria relevant to the position in question, including at least skills, efforts, responsibilities and working conditions. The criteria must be objective and gender-neutral.
• Employers must provide their employees with access to the criteria used to determine workers‘ wages and levels (wage-setting and wage evolution). Employers with at least fifty employees must also provide information about the wage development of employees.

Reporting obligations:

The reporting obligations will apply to employers with at least 100 employees, whereby the frequency of reporting will differ if the employer employs more than one employee:
• Employers with at least 250 employees must establish and report on gender pay gaps annually, and employers with at least 100 employees but fewer than 250 employees every three years. This report should enable employers to keep an eye on wage differences and thus map out their structures and policies in the field of wages. This always concerns information relating to the previous calendar year.

The report must be shared with the employees and employee representatives and made public on a national website. The report can also be requested by equality bodies, such as the Netherlands Institute for Human Rights.

The aforementioned obligations will also strengthen the role of the Works Council. For example, the Works Council will have the right of consent in determining the objective, gender-neutral criteria to be used for transparent remuneration structures, a right of access to the methods used in drawing up the report and it must be consulted prior to submission of the (tri)annual remuneration report.

The bill thus aims to amend the Equal Treatment of Men and Women Act, the Works Councils Act and the Placement of Workers by Intermediaries Act.

Legal presumption of wage discrimination

It follows from the bill that if it appears that there are wage differences (for example in the report), it is up to the employer to assess whether there are objective justifications for this. If an employer cannot demonstrate that there are objective criteria that explain the wage differences, the presumption arises that there is prohibited discrimination. An employer is then obliged to remedy these wage differences.

In the event of damage suffered as a result of a breach of a right or failure to comply with an obligation relating to the principle of equal pay, the worker may claim compensation. This is not only overdue remuneration, but also compensation for the loss of opportunities and immaterial damage. The employee can also go to court on the basis of an unlawful act.

Labour Inspectorate

Finally, the bill provides that the Labour Inspectorate will be given supervisory and enforcement powers. For example, the Inspectorate can impose administrative fines if certain obligations are not complied with.

Internet consultation

On 26 March 2025, the bill was published for internet consultation. The bill has adopted the provisions of the European directive as literally and to as limited an extent as possible.

After the internet consultation, the proposal is expected to be submitted to the House of Representatives in the third quarter of 2025. The bill must be implemented in final Dutch legislation by 7 June 2026 at the latest. The intention is to have the reporting obligations enter into force in phases, depending on the size of an employer. This would then be as follows:

• employers with 100-149 employees must submit the first report on 7 June 2031;
• Employers with 149-249 employees and employers with 250 or more employees must submit the first report on 7 June 2027.

We will keep you informed of the progress and developments.

 

For further information, please contact:

Ron Andriessen, Partner

Labré advocaten, Amsterdam

e: ron.andriessen@labre.nl

t: +31 20 3052030

 

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