Bill on equal pay for women and men
On 2 February 2021, the House of Representatives debated the Equal Pay for Women and Men Act, an initiative bill of the Dutch opposition parties PvdA, Groenlinks, SP and 50Plus. According to the initiators, in practice women are still paid less than men for equal work or work of equal value.
Bill on equal pay for women and men
Unequal pay has been in violation of various laws and treaties for many years now, such as the General Equal Treatment Act, the Equal Treatment (Men and Women) Act, article 646 of Book 7 of the Dutch Civil Code and article 23 of the Charter of Fundamental Human Rights. Yet women are still paid less than men for the same work, a persistent problem according to the initiators. In 2016, for example, women earned 8% less than men in the government and the difference in the business sector was as much as 19%. According to the initiators, this is because the current legislation offers insufficient possibilities to counteract unequal pay. The evidentiary presumption to demonstrate unequal pay currently lies with the employee. This creates undesirable thresholds. The bill therefore contains several instruments to combat unequal pay more effectively. The most significant measures are further explained below.
1. Shift of burden of proof
One of the most important measures is the shift of the burden of proof of equal pay from the employee to the employer. Employers are obliged to prove that equal pay for equal work is paid in the company.
2. Certification requirement for large companies
The shift of the burden of proof to the employer will - following Iceland's example - be effected through a certification system. Companies with more than 250 employees ('large companies') must obtain a certificate every three years proving that women and men are equally remunerated in the same job and for the same number of hours. An independent body will develop a transparent standard based on which this certification takes place. This autonomous administrative authority will also carry out this certification. The website of the certification body will publish which companies have been granted such a certificate. Smaller enterprises may apply for a certificate but are not obliged to do so.
3. Increased burden of proof on companies without certificate
Employers who are not in possession of the required certificate will have an increased burden of proof; the presumption of unequal pay is deemed to exist due to the lack of the required certificate. In that case the burden of proof of the existence or absence of unequal pay does not lie with the employee, but with the company. In that case the company must present facts to refute this presumption.
4. Obligation to provide information to the works council and in the directors' report
The initiators believe it is important that small and medium-sized companies also work towards more equal pay. Companies that have established a works council are obliged to provide information to the works council once a year about the pay differences between women and men in comparable positions. Article 31 of the Dutch Works Councils Act will be amended to this end. Furthermore, companies with at least 50 employees should include this information in the directors' report. If the remuneration ratio is imbalanced, (possible) explanations for this must be provided. It should also explain what is being done to reduce the pay gap.
5. Right to access
Companies with at least 50 employees are obliged to provide access to anonymised data on wages of other employees in the same or similar positions at the request of the employee.
6. Complaints procedure
If an employee finds that there are unexplained differences in wages, he or she can submit a complaint to the company. The company must immediately inform the works council about the complaint and has two months to deal with the complaint. If the employer has not dealt with the complaint within this period or has not dealt with it properly in the employee's opinion, the employee may lodge a complaint with the Netherlands Institute for Human Rights (College voor de Rechten van de Mens).
7. Supervision by the Inspectorate SZW
If a company (i) is in possession of a certificate which no longer meets the required conditions or; (ii) has provided incorrect or incomplete information or; (iii) the certificate has otherwise wrongly been issued to a company, the Inspectorate SZW is authorised to suspend or withdraw the certificate. Every suspension or withdrawal is recorded in the public register of the certification body. In addition, the Inspectorate SZW is authorised to impose an administrative fine of up to € 87,000. This amount may be increased in the event of a repeat offence.
The intended date of entry into force is still unknown. The bill provides for a transitional period of two years. This will give employers time to correct any differences in pay between men and women performing equal work or work of equal value, and to arrange for certification. However, it remains to be seen whether this law will be enacted. During the debate, the VVD and the CDA already questioned the enforceability of the bill. The next debate is expected to take place after the parliamentary elections in March 2021. It will then be examined whether there is a majority in the new House of Representatives. We will keep you informed.
Hermine VoûtePartner Attorney at law
P. Hermine E. Voûte, attorney at law, is member of the Employment & Benefits practice group in the Netherlands and chairwoman of the Diversity & Inclusion committee. She has over 33 years’ all-round experience in employment law, with a particular focus on high-profile dismissals, restructurings and collective dismissals, and co-determination procedures.T: +31 20 578 59 75 E: firstname.lastname@example.org